English

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VOCABULARY
50 words (define) (memorise)
2 sentences

BM. HW TASK
Define Business
Distinguish consumer goods , capital goods, consumer services.
Provide examples for each and explain

CASE:
Sean Walsh knew that his retail job was at risk during the economic problems of 2009. He
wanted to start his own business to give his family more security. Sean is a keen jet skier
and power boater but he cannot afford to own these expensive leisure products. When he
tried to hire a jet ski at a large lake in the USA he was surprised by the price – $400 a day –
and the refusal of the renting company to offer insurance. Sean did not want to take any
uninsured risks – he had a young family to think about – so he decided against renting. On
the way home he noticed a large number of boats and jet skis lying idle in drives and parking
lots and the idea occurred to him that these could be rented out to people who loved the
sport but could not afford a boat. He did some market research and discovered what he
considered to be a profitable gap in the market. He set up an online agency putting boat and
jet ski owners in touch with people who wanted to rent – taking 25% commission when a
rental was agreed. He also arranged insurance for both the renter and the boat owner. That
was six years ago – he has since set up his own boatyard buying and selling second-hand
power boats and jet skis, paid for from profits of the online rental agency.

HW: Answer Q 1 and Q 3 in case page 2

Q 2. FACTORS OF PRODUCTION

Land: Generally, labour refers to that input that covers the land itself and all
renewable as well as non-renewable resources. However, in the case, as the firm he
established is one for a service, there are next to no land inputs, unless you consider his
electric and internet consumption as these would “fuel” his agency.
Labour: Another input of labour that could be either manual and skilled labour. In the
case of Sean Walsh and his online agency, he likely has to invest in IT-skilled workers. If not
this, then Sean Walsh would likely do all the work in running the online- boat/jet ski rental
platform.
Capital: This refers to finance to set up the firm but also includes capital goods like
machines. For Sean Walsh, in addition to capital as money, he should consider that as an
online agency, he must also invest in capital goods of IT infrastructure like computers,
internet connectivity.
Enterprise: It is the input of production that provides the force of business which
provides the managing, decision-making, and coordinating role. Sean Walsh was the
one invested in the company. He felt “retail job was at risk.” More importantly, as a
consequence of wanting to give his family more security and of seeing a gap in the market, it
was he who decided to link boat owners with renters online.

HW. Act 1.1.1 JUSTIFY WHY EACH TASK FALLS UNDER THE IDENTIFIED BUSINESS
FUNCTION
1. “Setting prices of new products” falls under the marketing function of a business as
price decisions are one of the tasks that this department handles. Setting the price
can encourage or discourage consumption and setting the price is based on
understanding what the consumer wants/ needs and can pay for. This information is
often gleaned from marketing research .
2. Recruiting a new production manager
3. Allocating resources to purchase capital equipment
4. Deciding on the appropriate levels of stocks for raw materials
5. Finding out if consumers prefer one product design to another
6. Determining the level and number of employees the business needs for future
operations