Goods and Services

Services: these are intangible things which we can’t see, feel or touch. Example services of teacher, doctor, lawyer etc.

Goods: A good is anything tangible (which we can see, feel or touch) which has the power to satisfy human wants.

Goods can be categorized into following.

Free Goods: These goods are unlimited in supply and are provided by nature. These goods do not have production cost therefore we do not have to pay a price for it. Example: River, Sunlight, Air etc.

Economic Goods: These are scarce goods. These are the goods and services that are produced using scarce resources. These goods involve cost of production hence we have to pay a price for it. These goods have opportunity cost.

Consumer Goods: These are goods produced for direct consumption (using of goods and services to satisfy our wants). Examples: refrigerators, Television etc.

Producers Goods: These are also called as Capital goods. These are goods used for production (to produce goods and services to satisfy human wants and for which people are prepared to pay a price) of other goods and services. These goods are not used for direct consumption. Example:  Machinery.

Durable Goods: these are the goods which last for a long period of time. Example:  Car, TV etc.

Non - Durable Goods: These goods do not last for long time. These goods have short life. Example: Chalk Piece, Batteries etc.

Merit Goods: These are the goods which provide an advantage not only to a person but also to society and government. Example: School, Hospital etc.

Demerit Goods: These are the goods which lead to disadvantages to person, society and government. Example: Smoking, Drugs

Exchange: It is buying and selling of goods and services for money or through barter system.

Wealth: Stock of goods which have a money value. It can be

o   Private wealth: The stock of goods possessed by an individual person. Example: Car, Motorbike, house etc.

o   Social Wealth: Wealth which is owned by the community. Example: Roads, Parks, Playground etc.

o   National Wealth: Everything which is owned by the people of a country which has a money value. It is the sum of private and social wealth.