III. Vocabulary practice exercises

1. Choose the necessary word or word combination and put it in a sentence.

profit distribution channels business exchange tangible intangible factors of production service nonprofit organizations conversion process

1. Combination of such activities as production, distribution, and sale of

goods and services for a profit is defined as ---------- .

2. Natural resources, human resources, capital, and entrepreneurs are four

--------- .

3. The sequence of events that convert resources into products is called

---------- .

4. Some businesses produce ---------- goods, such as automobiles, breakfast

cereals, and computer chips; others provide ---------- services such as

insurance, dental care, or dry cleaning.

5. ---------- are an organized network of firms that work together to get a

product from a producer to consumers.

6. A sale is the ---------- of a product for money.

7. A doctor performs a ---------- by taking care of people when they are sick.

8. A company’s profitability is its ability to create an economic surplus or ------.

9. ---------- do not have the fundamental purpose of earning profits, although

they may provide goods and services.

2. Classify the following items as either goods or services:

1. car 11. perfume

2. medical aid 12. marketing campaign

3. travel agency 13. office equipment installation

4. microwave oven 14. management planning

5. road repair 15. newspapers and magazines

6. computer 16. newspaper delivery

7. fax machine 17. weight monitor

8. financial consulting 18. Disneyland

9. CDs 19. land tax preparation

10. employment agency 20. conditioner

GOODS	SERVICES

3. Match these parts of the business definition to the following real-life

situations.

Production of goods

Distribution of goods

Sale of goods

Sale of services

Examples:

Steel is converted into metal car parts production of goods

A car is moved from a factory to a car

dealership distribution of goods A salesman sells a computer. sale of goods

A programmer prepares a program for a computer sale of services

1. A truck carries a shipment of goods from

the factory in Seattle to the warehouse in

Portland. ________________________

2. A chemical plant turns raw materials

into fertilizer. ________________________

3. A salesman from Valentino Chocolates

convinces a customer to buy a box of

chocolates with a delicious taste. ________________________

4. Miners use special machines to dig out

the coal. ________________________

5. In many cases, coal must be shipped

long distances to reach the buyer. Most

coal shipments within a country are carried

by rail, barge, or truck. ________________________

6. A baby-sitter looks after your child

occasionally. ________________________

7. Rice is the basic food of many peoples

In Asia. Farmers grow rice in flooded fields

because rice needs a constant supply of

water. ________________________

8. Vladavia, Asiana, and other air carriers

regularly carry tourists from Eastern Russia

to Japan, Korea, and China. ________________________

9. Normally, products are shipped in large

containers and are packaged in their final

form only when they reach their destination. ________________________

10. Holdbrook House offers insurance and

banking in many different parts of the world. ________________________

11. Workers in Japan make these

comfortable Toyota cars. ________________________

12. A waitress takes your order for lunch. ________________________

4. Match the words on the left with their equivalents on the right.

1. production a) company

2. transformation b) economic surplus

3. to posses c) aim

4. capital d) manufacturing

5. entrepreneur e) a good or service

6. input f) to cooperate

7. output g) plant

8. firm h) to run a business

9. customer i) to operate

10. to work together j) businessman

11. to perform k) to own

12. physical l) money

13. product m) basic materials or skills

14. goal n) conversion

15. profit o) material

16. to operate a business p) finished product

17. factory q) consumer

18. to work r) to accomplish

5. Match the terms on the left with their definitions on the right:

company	a businessperson, someone who starts and operates a business
production	moving things from the place of production to the marketplace
entrepreneur	degree of excellence or superiority of a firm’s goods and services
profit	physical in nature
product	a registered business
distribution	non-physical in nature
sale	ability to create an economic surplus or profit
tangible	trying to do better than another company
intangible	goods, services, and ideas that result from the conversion of inputs
output	producing goods and creating services
profitability	the money that remains after all expenses and taxes have been paid
competition	a good or a service with tangible and intangible characteristics used as a basis of commerce
quality	exchange of a product for money