American Production UNIT 7

Goods and Services Goods and Services are all things that are produced by a country’s economy. Goods are things that are manufactured that consumers can buy and own. Services are things that people do. Consumers get the benefit of the service but do not own anything as a result. You CAN have some products that are a combination of goods and services. Ex. House painters.

Goods and Services Productivity: the rate and which goods and services are produced and the efficient use of resources. Specialization: people, businesses, regions, and nations focus on things they do better than others. Types of Services Personal: performed on consumers Repair: performed on goods you own. Other: retail services, entertainment services, banking and legal services.

GDP (Gross Domestic Product) GDP: the market value of all goods and services produced annually (one year).

Decisions Trade-offs: trading one thing for another Opportunity Cost: the value of choosing one thing over another. Ex. Living in the city vs. living in the country. Cost-benefit analysis: Economic model, compares costs and benefits of a decision.

Production Americans production of goods and services depends heavily on the process of mass production. Mass Production: the rapid production by machine of large numbers of identical objects.

Factors of Production Key Questions of Production: What to produce? How to produce? For whom are we producing? Four Factors of Production: Natural Resources/Land Capital Labor Entrepreneurship

Factors of Production Natural Resources: things provided by nature without human intervention. Ex. Land, animals, water, minerals, etc. Many natural resources are limited. Capital: equipment used to make other goods and services Ex. Tools, truck, machines, etc. Financial capital: money used to buy tools/equipment. Get loans from investors, stock.

Factors of Production Labor: human effort, skills, and abilities to produce goods and services. Entrepreneur: person who organizes and manages the factors of production for creating a business. Very important to the economy.