Production, Distribution, and Consumption KCCT Coach Book Chapter 11
Producers and Consumers • a PRODUCER is a person or organization that creates goods or provides services • examples: farmers produce crops, plumbers produce plumbing services, bankers produce financial services • can you think of other examples of producers?
Producers and Consumers • Producers that create physical goods sell their products to DISTRIBUTERS such as retail and wholesale outlets • these outlets then sell their products to CONSUMERS • a CONSUMER is a person who buys GOODS and SERVICES
Producers and Consumers • when a CONSUMER is planning on buying something, two factors go into her decision: PRICE and QUALITY • Generally, consumers will compare PRICES and choose the least expensive item (if the quality is the same)
Producers and Consumers • QUALITY is also important—how well the item is made and how long it will last • The consumer will consider the PRICE and QUALITY of services too, when making an economic decision • before hiring someone for a SERVICE, the CONSUMER will often ask for an ESTIMATE (a projection of the cost) • what could you get an ESTIMATE for?
Joe bought a LynkCo brand watch from Bob’s Watch Emporium and gave it to his girlfriend, Tina. Who is the producer? • Joe • Tina • LynkCo • Barry’s Watch Emporium
If you were planning to purchase a new pre-packaged computer system, you would want to do which of the following? • ask the consumer for an estimate • review the service warranty • look for the most expensive price • contact the salesperson about the computer she built
Sources of Goods and Services • when you think about producers you probably think of MANUFACTURERS • however, the government is also a PRODUCER • the government offers goods and services such as police forces, fire fighting departments, education, and food surpluses
Sources of Goods and Services • in the case of the government as a producer, the consumer is the general public • the goods and services are “bought” with TAXES • TAXES are monies paid to the government to fund its operation
Sources of Goods and Services • private businesses also offer goods and services similar to those provided by the government • Police vs. security guards • public schools vs. private • food surpluses vs. grocery stores
Sources of Goods and Services • the main difference between government and private services is the reason for providing the goods or services and the people that benefit from the goods or services • the government’s purpose is to meet the people’s needs • the private business’s purpose is to make a profit
Sources of Goods and Services • the people that benefit from the government’s public services are members of the public • How do you benefit from public services?
Which of the following is provided by the government? • plumbing services • voluntary surgery • television sets • sewage treatment
Private businesses are paid for their goods and services primarily by: • the public • taxes • private individuals • government
Specialized producers • Many producers create a wide variety of products designed to meet the needs of many people • some producers SPECIALIZE. this means they create only specific goods or services designed to meet specific needs • one producer may make bath soap, laundry detergent, car cleaner, sponges, brooms, and paper towels, while a producer that SPECIALIZES would only make one product
Specialized Producers • producers that specialize do so for several reasons… • their product can be the best it can be, because all the focus is on it • the producer can develop a good reputation by producing a great product • some needs are so specific, that only a company that specializes can meet that need
Which of the following businesses is the most specialized? • Andy’s Bicycles • Bob’s Tubs and Stuff • Cindy’s Department Store • Dee’s Dresses, Doughnuts, and Duck ponds
By specializing, producers do all BUT which? • provide a higher quality product • offer a vast selection for consumers • work to build a solid reputation • meet a very specific need
Which producer provides legal services? • plumber • baker • attorney • manufacturer
A company manufactures clocks by the thousand. The clocks are sold to individuals by: • consumers • distributors • manufacturers • the government
The two primary concerns for consumers when they make a choice are: • price and quality • price and color • color and quality • price is the only concern
The consumers of goods and services provided by the government are: • private individuals • the public • government • distributors
Which of the following is a service provided by a private business? • fire departments • security guard service • public schooling • police departments
Which business is most specialized? • Sal’s Sporting Goods store • Lou’s Shoes • Tula’s Department Store • Malcolm’s Anything for a Buck