Chapter 18 Goods and Services

1. Section 1:American Production Section 2:Distributing Goods Section 3: You the Consumer Chapter 18Goods and Services

2. Section 1: American Production The Main Idea American systems of mass production have made it possible to produce goods more efficiently, which raises the U.S. standard of living. The American economic system has made our economy one of the most successful in the world. Reading Focus • What are goods and services, and why are they important in the economy? • What are the main features of modern mass production? • What is the service sector of the economy? • How are profit, risk, and innovation related?

3. Section 1: American Production Main features of modern mass production: • Machine tools—produce parts that are exactly the same • Interchangeable parts—easily fit with other parts and are easily replaced • Division of labor—specialization in each area of production speeds the process • Assembly line—machines and workers move product through production stages

4. Section 1: American Production Changing power sources: • Early factories used water power. • Late 1700s—Steam power replaced water power. • Late 1800s—internal combustion engines; electricity

5. Section 1: American Production The profit motive drives the economy: • Encourages people to take risks • Encourages innovations in production and marketing

6. SECTION 1 Three Main Features of Mass Production division of labor machine tools standard parts Question: What are the main features of modern mass production?

7. Section 2: Distributing Goods The Main Idea Producing goods is only the first step in filling consumers’ needs. Getting goods to consumers involves a complex transportation system that makes it possible for American businesses to sell their goods throughout the country and the world. Reading Focus • How are goods transported from manufacturers to consumers? • How are services delivered to consumers in the United States? • How are goods and services marketed to consumers?

8. Section 2: Distributing Goods Transportation and the U.S. economy: • Transportation systems move products around the country. This is called distribution. • Railroads—created a single large market in the United States; chief source of transportation through the mid-1900s • Air transportation—carries mail and transports freight with great speed • Highway system—automobiles are the leading means of transportation today

9. Section 2: Distributing Goods Benefits of mass marketing: • Sells goods in large quantities • Self-service—saves time and labor; many customers can shop at the same time • Standard packaging—fewer items must be weighed or measured • One-price system—prices are stamped onto the products; eliminates most bargaining • Bar codes—enable stores to keep up with inventories and collect information

10. Section 2: Distributing Goods Manufacturers, wholesalers, and retailers work together: • Manufacturers sell to wholesalers in large quantities. • Wholesalers store goods and sell them to retailers. • Retailers sell goods to the public. • Wholesalers link the factory to the retailer.

11. SECTION 2 Benefits of Mass Marketing efficient inexpensive Question: What are the benefits of mass marketing?

12. Section 3: You the Consumer The Main Idea As consumers, we learn about the products we buy so that we can make the best choices. Some independent and governmental organizations help protect consumers’ interests. Reading Focus • What are the keys to becoming a wise consumer? • What should a consumer consider in deciding to buy on credit? • What do independent organizations and the government do to protect consumers?

13. Section 3: You the Consumer Wise consumers • study advertisements for special sales and use coupons. • judge product quality and buy only what serves their needs. • study product labels. • compare various products, brands, stores, and prices. • read warranties and instructions.

14. Section 3: You the Consumer Independent organizations and the government protect consumers. • Government labeling requirements provide contents, health, and safety information. • The Better Business Bureau assists consumers with unfair business practices. • Government agencies protect consumers from false advertising, health and safety risks, and mail fraud. • States and cities provide consumer protection offices. • Consumers Union publishes reports on most products sold.

15. Section 3: You the Consumer Installment plans and charge accounts: • Charge accounts—convenient; can help establish good credit; interest rates make debt harder to pay off • Installment plans—allow purchases without paying the full amount up front; buyer uses product while paying for it; product can be repossessed if payments are missed; service charges and interest rates increase the total cost

16. publish product comparisons and reports set and enforce regulations How Independent Organizations and Government Help Consumers How Independent Organizations and Government Help Consumers help consumers when treated unfairly publish consumer information SECTION 3 Question: What do independent organizations and the government do to protect consumers?

17. Chapter 18 Wrap-Up • 1. What are the three main features of mass production? • 2. What incentive is a key part of mass production, and why is it important? • 3. Why does the U.S. economy depend on the transportation and marketing of goods? • 4. How are products distributed from the manufacturer to the customer? • 5. What choices are available to help consumers make smart purchases? • 6. What are the advantages and disadvantages of using charge accounts, credit cards, and installment plans?