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FIND OUT MORE. Human impact 64–65 • Industry 204 • Manufacturing 205

Production involves the use of Earth’s raw

materials and human labour to make useful

things. Every society uses its land, people,

skills, and tools to make products, from petrol

to stainless steel and running shoes. In

modern economies, companies aim to

maximize profits by keeping their

production costs down and sales up.

WHAT ARE CONSUMER GOODS?

Consumer goods are products manufactured to satisfy

personal needs. Goods that are required for the

production of other goods and services, such as paper

or coal, are known as producer or capital goods.

Consumer goods can include anything from clothing

and CDs to children’s toys and Coca-Cola™. Demand

for consumer goods is often created by advertising

and by technological changes.

Someone who buys goods and services

is called a consumer. Most people are

consumers, because they need to buy basic

goods, such as food, shelter, and clothing,

in order to live. Producers need to predict

what consumers want, so that they can

make goods that will sell.

WHAT GIVES CONSUMERS POWER?

Consumers need a way to pay for goods before they

can decide which goods to buy. Their buying power

comes from income (wages earned by working) or

investment (profits made from owning shares or

property). A wide choice of products gives consumers

some power over producers, since a company will go

out of business if consumers do not buy its product.

WHAT IS ECONOMIC GROWTH?

An economy grows when its production increases

in quantity. Growth in the economy can lead to more

jobs and more income for consumers to spend. It also

frees resources for other uses, such as science, the arts,

or sport. However, economic growth can also create

difficulties, such as environmental problems and

a widening gap between rich and poor.

MASS PRODUCTION 1

These cars are produced on a

state-of-the-art factory

production line. Automated

assembly lines help to cut

production costs. Sometimes,

producers pass these savings

along to consumers in the form

of lower prices, hoping to sell

more cars than their competitors.

4 ON THE ROAD

These cars will be shipped around the world to meet consumer demand.

Sometimes it is cheaper for producers to manufacture goods in one

place. Sometimes it is cheaper to manufacture them in several locations.

1 CONSUMER POWER

Consumers have the most power in markets where there are many

traders. It is easy to check and choose between many products and

prices on display, such as on a fruit and vegetable stall.

CONSUMERS

PRODUCTION

Video screens

display the latest

share prices of

different companies

Traders

buy and sell shares on

behalf of companies

and investors

USA 1,700

Japan 934

China 893

Germany 595

Italy 299

France 283

UK 270

South Korea 240

LARGEST MANUFACTURING OUTPUT (US$ BILLION)

economy