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 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.