Economic goods - types of goods

Free and economic goods

Economic goods - The subject of economic consideration is only those goods that are scarce. We call them economic goods. A distinction must be made between scarcity and rarity. A rare commodity doesn't have to be scarce. There is a scarcity when the desired amount of goods and the amount of goods available differ significantly. Economic goods are characterized by the fact that their provision usually incurs costs.

Free goods - They are goods that are abundant in proportion to needs. They are not scarce and therefore not objects of economic activity. The number of free goods is small. Whether a good is “free” can only be decided on a case-by-case basis: air by the sea, free good; Air in a mine (ventilation) - economic good (costs).

Consumer goods and capital goods

Consumer goods directly satisfy household needs. Production goods are used for production, which provides new and different goods. A similar distinction is made when speaking of goods of the first order (consumer goods) and goods of a higher order (distinction based on proximity to consumption).

Consumer goods and durables

In the case of consumer and production goods, a distinction is also made between consumer goods and durable goods.

Consumer goods - Consumer goods are lost in a one-off act of consumption (e.g. milk, bread). Consumer goods in the area of production are consumed in the production process (e.g. electricity to drive machines) or become an essential part of the goods produced (e.g. paint and glue in furniture production).

Consumer Goods - Durable goods allow multiple use. Consumer goods, which are durable goods, permit several acts of consumption, namely as long as the good is functional (examples: television set, refrigerator).

Typical consumer goods in production are machines and tools. They are used over a long period of time and wear out with use. The depreciation that takes place during production is recorded.

All material goods that we use and consume ultimately come from our natural environment, the production factor nature. If the goods are supplied by nature ready for use or consumption, they are also referred to as natural goods or environmental goods. If they are changed in any way by humans, for example sea water into drinking water, clay into bricks, iron ore into industrial steel, gold into jewelry or grain into flour, they become industrial goods. The transport from the place of discovery to the place of consumption or the purchase or sale also turn the natural goods into industrial goods.

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