Prepared by Sandrea Butcher

LEVELS OF PRO-DUCTION

The level of production depends on the following:

Output

Capi-tal

LandLabou

r

Availability of resources

Level of technology

Cultural patterns

Political and economic policies of the coun-try

There are four production levels

Subsistence

• This is production to meet basic needs.• It happens on a small scale and satisfies in-

dividual/community needs, but not country wide needs.

• There is very little to no surplus

Domestic

• This is country-wide production.• Goods and services produced locally are con-

sumed locally.• It denotes self sufficiency and reduces the

need for imports.

Surplus

• This occurs when domestic production exceeds domestic consumption (excess supply).

• It is important to note that domestic needs and wants are satisfied first, then the surplus can be used to satisfy foreign needs.

Export

• Some countries produce goods for the export market

• This may occur because:• there is no demand for the good locally• The country has a quota to meet with

an overseas market

• In some countries governments set up Export Pro-cessing Zones (EPZs)

• Businesses receive incentives such as tax exemp-tions

• In the Caribbean region activities in EPZs include textiles and data entry.

Montego Bay Free Zone

• According to Index Mundi, Barbados exports Aircraft parts