Nature and Scope of Business

This set of vocabulary flashcards covers the definitions, features, and classifications of business activities, including industry, commerce, and trade, as outlined in the lecture notes.

Business

An activity concerned with production and exchange of goods and Services with the object of earning profits.

Business (L.H. Haney definition)

Human activities or any activity directed towards acquiring or providing wealth through buying and selling goods.

Profit motive

The most important element of business; without economic benefit, a business cannot continue and may face losses.

Finance

The basic input for running a business required to take care of fixed and working capital requirements.

Entrepreneur

The person who gets the idea and takes steps to establish a business, bringing together factors of production like land, labour, and capital.

Risk / uncertainty

A feature of business relating to the future, such as changes in demand, changes in price, and strikes by employees.

Utility

The usage value created by a business in the goods provided to consumers, which may take the form of place and time.

Economic activity

All activities relating to the production and distribution of goods and services that help to make profit.

Consumer Satisfaction

The ultimate aim of business to supply quality goods at a satisfactory price with after-service to prevent customers from buying alternative commodities.

Industry

A branch of business concerned with manufacturing goods, involving collecting raw materials and processing them to get finished, production, or intermediary goods.

Primary Industry

Industries connected with extraction, production, and processing of natural resources, classified as Genetic or Extractive.

Secondary Industry

Industries related to the process of raw materials along with labour and machine to get finished production; includes construction, processing, analytical, manufacturing, and synthetic industries.

Tertiary Industry

Service industries that act as the backbone of the economy by allowing the smooth flow of goods from producers to consumers, such as banking, hospitals, and educational institutions.

Commerce

All activities necessary to bring goods and services from the place of production to the place of consumption, involving the distribution of finished goods.

Trade

The aspect of commerce referring to the exchange of goods, consisting of purchasing and selling activities.

Internal trade

The purchasing and sale of goods within a country, divided into local, state, and interstate trade.

External trade (Foreign trade)

Trade that takes place between two countries, explained as imports and exports.

Wholesale trade

Trade where goods are purchased in large quantities and sold to retailers, serving as the link between the producer and retailers.

Retail trade

The sale of goods to final consumers by purchasing them from wholesalers.

Aids to trade

Activities providing arrangements to help trade reach the ultimate customer, including transporting, banking, warehouse, advertisement, communication, and insurance.