1. Chapter 18 Goods and Services Sections 1-3

2. 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

3. 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…

4. 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

5. 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

6. 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.

7. 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?

8. 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.

9. 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.

10. 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.

11. 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.

12. 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?

13. 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

14. 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.