Types of Goods in economics

Types of Goods in economics

(a) Consumer   goods; these are goods meant for final consumption.   They do not involve wore processing. For example food stuffs, books, clothes, etc.              .

(b) Producer (Capital) good; these are goods which are used in the production of other goods. For example raw materials, machines, etc.

(c) Intermediate goods: These are goods that still need more processing in order to obtain final goods. For example cotton lint.

(d) Durable goods; these are goods which are long lasting. For example buildings, machines, etc.

(e) Free goads; these are goods which exist naturally in abundance such that one’s desire can be satisfied at zero prices. For example, water, sunshine, air, etc.

(f)  Economic goods; these are goods which are relatively scarce as compared to human wants and their consumption involves a cost.

Characteristics (Features/qualities) of economic  goods

  • They have monetary value.
  • They are marketable
  • They provide satisfaction (utility) to the consumer
  • They are relatively scarce r
  • They are transferable ill terms of ownership.

(g) Private goods; these are goods which are enjoyed exclusively by individual e.g. personal cars, clothes, houses etc.

(h) Public goods; these are goods provided by  the government  (state) and  they are collectively owned by the members of society in such a way that their consumption by an individual does ‘not reduce the amount available to other individuals at the same time, For example public roads, hospitals, defense etc.

Characteristics (Features) of public goods

  • They are non-divisible, that is, they are equally available to all individuals in society
  • They are non-excludable, that is, their consumption by an individual does not reduce me amount available to others at the same time.
  • Their consumption does not involve a direct cost.
  • They are provided by the state on behalf of the citizens
  • There is non- rivalry in their consumption, that is, there is no competition ill their consumption,

(i)  Merit goods;  these  are  goods  whose  consumption  is  deemed  intrinsically  desirable  to  the consumers such that  their social benefits exceed the private gains when consumed, For example education, health care and safe water etc.

(1) Essential goods (Necessities); these are goods that man cannot do without. For example food, shelter, water etc.                                                                                                      .

(k) Normal goods; these are goods whose demand increases as the consumers’ income increases.

(J)  Inferior goods; these are goods ‘whose demand decreases as the consumers’ income increases. They are mainly demanded by the low income earners, For example second hand clothes,

(m) Giffen goods; these are goods which take a large proportion or consumer’s  income such that when their prices increase, consumers tend to reduce on the consumption of other goods and buy more of them. For example basic food stuffs like banana, posho,  etc.

Note:   All Giffen goods are inferior good; but not all the inferior goods are Giffen.

(n) Substitute goods; these are goods which serve the same purpose. For example tea and coffee,

(o} Complementary  goods. These are goods that are jointly used together, For  example cars  and petrol, cameras and films,  guns and bullets etc.

(p) Services; these are intangible items used to facilitate the production of goods and services. For example banking services, transport services, services of a teacher.

(q) Complementary goods are goods that are jointly demanded e.g. car and petrol, guns and bullets, fountain pen and ink, bow and arrows, chalkboard and chalk, toothpaste and tooth brushes

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