An outline of the levels of production in an economy

1. Prepared by Sandrea Butcher
LEVELS OF
PRODUCTION

2. The level of production depends on the following:
Output
Capital
Land
Labour
Availability of resources

3. Level of technology
Cultural patterns

4. Political and economic policies of the country

5. There are four production
levels
Subsistence
• This is production to meet basic needs.
• It happens on a small scale and satisfies
individual/community needs, but not country
wide needs.
• There is very little to no surplus

6. Domestic
• This is country-wide production.
• Goods and services produced locally are consumed
locally.
• It denotes self sufficiency and reduces the need for
imports.

7. 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.

8. 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 o
verseas market

9. • In some countries governments set up Export Processing
Zones (EPZs)
• Businesses receive incentives such as tax exemptions
• In the Caribbean region activities in EPZs include textiles
and data entry.
Montego Bay Free Zone

10. • According to Index Mundi, Barbados exports
Aircraft parts