1. Goods and Services Chapter Eighteen

2. What are Goods and Services? Goods are things that are manufactured, or made, and that consumers can buy and own. – Examples: Food, Clothes, Cars, and Buildings. Services are things people do for consumers, who receive the benefit. – Examples: Medical Care, Haircuts, Babysitting, Lawn Care, Mechanical Work, and Painting.

3. GDP Gross Domestic Product (GDP) is the market value of all goods and services produced annually in the United States. Measures how well the economy is performing. In 2010: United States14.7 Trillion China5.8 Trillion Japan5.5 Trillion

4. Mass Production Mass Production is the rapid production by machine of large numbers of identical objects. Each worker can then be responsible for monitoring only one machine instead of having to make the whole product. Assembly Lines. Benefits: – Specialized workers can work faster and are more efficient. – A single worker can perform the final assembly. – Interchangeable parts: If a part wears out, then it can easily be replaced by an identical part.

5. Power for Mass Production Historically water power was the main source of power to operate machines. Early 1800’s: James Watt invented the steam engine. Late 1800’s: Internal combustion engine was developed. Late 1800’s: Thomas Edison made the widespread use of electricity practical.

6. Types of Services Personal Services: Are performed directly on customers. – Medical care, Yoga lessons, and Haircutting. Repair Services: Are services performed on goods that you own, to repair or improve them. – Auto and Air Conditioning Repair. Retail Services: Are selling you something you can own. – Malls, EBay, and Wal-Mart. Entertainment Services: Are offering services that will entertain you. – Movies, Theatre, and Music.

7. The Service Sector Our economy is sometimes called a service economy due to fewer and fewer workers being involved in the manufacture of products.

8. Distributing Goods Railroads: – Historically, rails were the main means of travel for goods and people. – Usually, carry bulk cargo or raw materials. – Today, measured in dollar value, only about 4% of goods are transported by rail. – 1960-70’s, a lot of railroads went out of business. Airlines: – Transports the majority of all first class mail. – Only transports roughly 3% by value. – Problems: Can only deliver to large airports. Higher Prices for aviation fuel. Price of increased security due to September 11 th.

9. Distributing Goods Highways: – Are the leading means for transportation within the U.S. – They Carry ¾ of all goods by dollar value. – The U.S. has about 4 million miles of roads. – Relies on dependable roads and a steady supply of fuel. – Problems: As gas prices rise, so do the prices of the goods. Water: – Rivers, Oceans, and Canals. – Only about 1% by value is transported this way. – Problems: Must be near water and subject to the weather.

10. Marketing Goods and Services Marketing is the process of making goods and services available to consumers and convincing them to buy the product. Mass Marketing is the process of selling a good or a service in which the same product, price, promotion, and distribution is used for all consumers in a particular market – One-Price System: Bar-codes. – Self-Service: Shoppers select their own goods. – Standard Packaging: All goods are already wrapped.

11. Keys To Wise Consuming 1. Learn where to buy 2. Avoid impulse buying 3. Use coupons 4. Go to sales events 5. Buy in bulk quantities 6. Consider alternatives – generic, used 7. Study labels 8. Consider the costs of buying – travel, shipping, time spent

12. Buying Goods and Services Pay Now: Cash or Debit Cards. Pay Later: Charge Accounts, Credit Cards, and Installment Plans. Dangers of Credit: Interest Rates, Annual Fees, Stolen Cards/ID Numbers, Missed Payments.

13. Consumer Protection Problems: – False labels or advertisements – Unfair business practices – Defective items

14. Private Consumer Protection Groups Better Business Bureau – Investigates complaints of illegal or unfair business practices. Consumer Reports – Tests and evaluates products; no paid advertisers.

15. Government Consumer Protection Groups Federal Trade Commission (FTC) – Can sue for false advertising or labels. Department of Agriculture – Inspects and grades meat, poultry and produce. U.S. Postal Service – Protects against mail fraud. Consumer Product Safety Commission – Monitors products to avoid injury or harm. Food and Drug Administration – Approves products for use.

16. Problems Caused by Consumers Shoplifting Broken or damaged items Refunds for used items Failure to pay for items on store issued credit