Mayer defines the term good as,
“Anything that satisfies a human want.”
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According to Alfred Marshall,
“Goods are desirable things. All things that satisfy human wants are called goods in Economics”.
1. Free Goods:
Free goods are abundantly available. We do not pay any price for its use. They are the free gifts of nature. So free goods are not produced by human effort. Air, water, sunshine etc. are free goods. Free goods are available in plenty in relation to demand.
2. Economic Goods:
Economic goods are goods whose supply is scarce in relation to demand. Economic goods are not available free. One has to pay a price to have economic goods. Such goods are man-made. Human effort is necessary to produce them. Economic goods are also known as wealth. Table, Pen, Car, Utensils, book, rice, TV etc are economic goods.
The distinction between free goods and economic goods is not a water tight compartment. With the change in time, place and circumstances, a free good may be an economic good.
Water in a river may be a free good but water in cities may not be. Similarly air is one of the free goods but air in deep mines is an economic good. However, free goods have become economic goods with the passage of time.
3. Consumers’ Goods:
Consumers’ goods have the ability to satisfy human wants directly. Book, Pen, table, chair, food, clothes and the like are goods that directly satisfy our wants. So such goods are called as consumers’ goods.
They are goods of first order because they directly enter into final consumption of the consumer. Consumers’ goods may be single use goods like drinks, milk, sweets, inl, bread etc., semi-durable goods like shoes, furniture’s, clothes etc. and durable use consumers’ goods like car, radio, TV, DVD, VCP, and VCR etc.
4. Producers’ Goods:
Producers’ goods are also known as capital goods. These goods do not give us direct satisfaction like consumers’ goods.
So producers’ goods indirectly satisfy human wants. With the help of producers’ goods, we can produce other goods which satisfy our wants directly.
However, producers’ goods are used for further production of goods. Machines, tools, tractors and other kinds, of capital goods are examples of producers’ goods. Producers’ goods may be single use goods or durable goods.
Raw materials like iron ore, fuel of different kinds are single use ‘producers’ goods while tractor, plants, machines, tools etc. are durable producers’ goods. Durable producers’ goods can continue to produce other goods for a long period of time. We knew the difference between consumers’ goods and producers’ good.
Further a good may be producers’ good or consumers’ good depending upon its final use. For example, a car kept for family use is a consumers’ good while the same car used as taxi becomes a producers’ good. Similarly electricity used by domestic households is a consumers’ good while it becomes a producers’ good in a factory.
Material goods and non-material goods:
Material goods include only visible and tangible objects. For example, Car, TV, Radio, building, furniture etc. are material goods. On the other hand, services of various kinds (like service of a doctor, professor, domestic servant, good will of a business etc.) are non-material goods.
As a matter of fact, services of various kinds are not tangible and visible. Non-material wealth. So we can tell that all human services which satisfy wants can be classed as non-material goods.
Note: Good will of a business means the advantage of reputation and continued custom which the business has acquired. In other words, good will refers to the attachment of the buyers to a particular product. It is included under non-material goods (Elementary Economics by K. M. Patnaik, Page-34).
5. Private Goods:
Goods may be classified as private goods and public goods. Private goods are bought and sold in the market at a price. If somebody wants to use private goods then he has to pay the prices charged for these goods.
If somebody cannot pay the prices charged for these goods, then he can .not use these goods. He will be excluded from the use of such goods. So all economic goods we use regularly by paying a price charged for such goods are treated as private goods.
The peculiarity of such goods is that one who cannot pay for such commodities is simply excluded from its use. So private goods are subject to the principle of exclusion. Furniture, pen, table, car, clothes, house, TV, etc. are private goods.
6. Public Goods:
Such goods are not available in the market. Such goods are equally available to all. The consumption of these goods is not divisible. This means consumption of such goods is non-rival in character. No one is denied from enjoying the benefits of Public goods even if he does not have ability to pay for such goods.
Such goods are provided by the government and are not available in the market. Such goods are jointly or collectively used by the people. Examples of such goods are national defense, roads, street-light, etc. If somebody gets the benefits of street-light, others to get the same benefit. No person can be denied its use.
Perishable goods and Durable goods:
Perishable goods cannot be kept for a long period of time. The value of perishable goods is short-lived. The quality of such goods deteriorates if stored for a long period of time. Vegetables, sweets, fruits etc. are examples of perishable goods.
On the other hand, durable goods can be stored for a pretty long period of time. The users can derive satisfaction from the use of such goods for a long period. Durable goods form a part of our domestic assets.
The value of durable goods last for a long period of time without any deterioration in their quality. We can make repeated use of such goods. Car, motorcycle, wristwatch, TV, VCR, furniture etc. are examples of durable goods.
7. Intermediate Goods:
Intermediate goods are used for production of other goods. Intermediate goods are generally semi-finished products. Such goods are in use for the production of other goods.
So intermediate goods are those goods which are purchased for further processing or for resole. The sale of intermediate goods is excluded from Gross National Product (GNP). For example, raw-cotton is a raw material. To convert cotton to cloth involves several processes.
First the raw-cotton will be used for the production of yarn. So yarn is an intermediate product (or goods). Then yarn would be sold to some other producers to produce cloth. Then cloth would be treated as final goods.
Similarly to prepare some furniture’s we need wood, foam etc. So wood, foam here are intermediate goods and furniture’s are the final goods. Now-a-days to produce some final goods we go through several processes.
In each process we may get an intermediate good and them this intermediate goods will be further processed to produce the final goods. In India we have several processing industries.
8. Final Goods:
Final goods are end products. Final goods are sold in the market for final consumption and investment. Such goods are either consumers’ goods or producers’ goods. Such goods are not eligible for further processing. Final goods satisfy the wants of ultimate consumers or producers or both.
The value of final goods constitutes Gross Domestic Product (GDP). The distinction between intermediate goods and final goods is not rigid. A commodity may be intermediate good or final good depending upon its use.