Download Chapter 18 Goods and Services

Chapter 18
Goods and Services
Sections 1-3
Production
• Gross Domestic Product (GDP) Amount
of all the goods and services produced
inside a country.
• USA GDP is 13.543 Trillion dollars.
• Other measures of economic success is
employment percentage, or percentage of
the population employed
Mass Production
• Mass Production – production by machine
of large numbers of identical goods.
• Allows the production of large number of
goods for sale and export.
• Eli Whitney – Creates the
Interchangeable Part – parts that work on
any product. Example guns, cars, etc…
Foundations of Mass Production
• 1. Machine Tools – machines that produce
parts that are exactly the same.
• 2. Standard Parts – any part will fit another part.
This makes replacement easier.
• 3. Division of Labor – divides production into
smaller non-specialized jobs. This leads to
faster production
• 4. Power Source – what makes the machines
run. 1700’s – water 1800’s – Steam 1900’s electricity
Assembly Line
• The automobile creates the assembly line.
• Each person assembles a part until the
product is whole.
• Welcome to Neillco pen company
• 1. be fast
• 2. be perfect
• 3. no breaks
Distribution
• After production of goods the next step is
distribution – the spread of goods to
consumers for sale.
• Railroads – as railroads were built
products began to be sent using this new
technology.
• Speed – the faster things are produced the
faster they sell this increases demand.
Distribution cont…
• Air – planes carry people, products, and
communications very fast.
• Highways – make up over 80 percent of
transportation. Most common way to
travel. What could cause this to change?
Mass Marketing
• Selling goods in large quantities.
• Self-Service – rather than people selling
things to you, you get your own things.
Grocery stores have self check-out. This
cuts down on labor costs.
• Standard Packaging – goods now come
already packaged ready for sale. No
handling by seller keeps costs down.
Mass Marketing cont…
• One-Price System – prices are stamped
onto the product using a bar code. This
takes away confusion and streamlines the
process.
• Mass marketing keeps costs down.
• This makes products cheaper for
everyone.
Shopping
• Malls – large complexes featuring many
kinds of stores.
• Easier shopping increases the chance that
people will spend more.
• Specialty Stores – chains that specialize
in one product or brand. Aeropostale,
American Eagle, and Abercrombie and
Fitch.
Wholesale v Retail
• Wholesale – buying goods from large
stores in large quantities.
• Sell to the stores who sell to the public.
• Retail – stores that sell goods to the public
at a higher price.
• Advertising – informs people about
products and tries to get them to buy
certain products
• Brand Name v. Generic.
The Consumer
• A person who buys goods or uses
services.
• Price v. Quality – Brand Names cost
more and have higher quality. Generic
brands cost less and have lower quality.
• Is this true?
Reading Labels
• Fair Packaging and Labeling Act –
businesses have to supply accurate label
information.
• Nutrition Labeling and Education Act –
Indentify contents.
• Serving size, Fat, Cholesterol, Sodium,
and Fiber
Buy Now Pay Later
• Charge Accounts – allows people to
purchase goods with a promise to pay.
• Installment Plans – with a down payment
you can take a good and pay equal
amounts at a time until the balance is paid
off.