Introduction
What are bags, shoes, and watches?
Yes, you are right! They are goods in economics.
Goods are material things wanted by human beings. They are tangible which means they can be touched.
What do we get from doctors, teachers, and nurses?
Your guess is correct! You get services.
Services are non-tangible things. When we are hungry, we take food. When we are sick, we take medicine. Some of our wants are satisfied by goods and some by services.
Economic Goods
An economic good is a product or service with societal utility. Economic products also have a degree of scarcity, which results in a loss of opportunity. Economic goods are man-made and are sold and purchased in the market only.
Free Goods
The goods which have an unlimited supply and are provided as gifts of nature are free goods.
A free good is one that society requires but is freely available. It is a good that is plentiful. Because we can breathe it as much as we like, for instance, the air is a free good. We do not deplete the resource that is available to others by breathing.
Water is typically some other free good. If you stay with the aid of using a river, you could take water without decreasing the quantity to be had by others. Though in a few areas, water can come to be scarce in drought conditions – then water is now not a free good.
Private Goods
A private good is a product or service produced or produced by a business-owned entity that seeks to satisfy consumer demand for profit by selling it in an open market. Characteristics of individual products:
- It involves rivalry, that is consumption by one restricts another.
- It involves cost so non-payers are excludable.
- It can be traded in the free market.
- It can be rejected by consumers if they have another alternative.
- It has opportunity cost which means consumers have to let go of the benefit from other alternatives
Normal Goods
A typical good is one whose demand rises as a result of an increase in consumer income.
- Demand and income are positively correlated for typical products.
- Food, clothing, and household equipment are a few examples of normal items.
Complementary Goods
Substitute Goods
Two alternative goods that could be used for the same purpose are substitute goods. Substitutes present the consumer with alternative choices. If the price of one good increases, then the demand for the substitute is likely to rise. They have positive cross elasticity of demand.
Inferior goods
Inferior goods mean that a rise in income results in a decrease in demand. It is good with a poor demand elasticity of income (YED). is an illustration of a subpar good. It refers to affordability, rather than quality.
Economic Bad
An economic bad is anything that would make it more expensive or difficult to get rid of. Pollution, garbage, and disease are problems that can be caused by human activity.