Types of Goods

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Macroeconomics

Final Good

  • Goods used for final consumption.

  • Used by the end-consumers/users. It satisfies customer’s wants directly

  • Known as final goods because once it has been sold it passes out of the active economic flow.

  • No further transformation is made by any producer.

  • May undergo transformation process by purchaser but that is not come under economic activity as it doesn’t yield anything.

  • E.g.: tea leaves used at home to make drinkable tea, milk etc.

Consumption Goods

  • Consumed by ultimate consumers

  • Non-durable: perishable in nature, e.g. food, clothing etc.

  • Consumer-Durable: car, furniture, television etc.

Capital Goods

  • machines, implements, tools

  • E.g. Printer

  • Make the production of other commodity feasible.

  • Durable in nature

Intermediate Good

  • Goods that are used for further production is called intermediate goods also called inputs.

  • It is further goes into transformation process.

  • It adds earning in active economic activity.

  • Tea leaves used by restaurant to make drinkable tea

  • Therefore, Types of goods is not depending on nature of goods but it depends on economic nature of its use.

  • Goods used for the production of other goods

  • Goods used by producers as material inputs

  • Plants, machinery, factory

  • E.g. cotton yarn used to make cloth,

  • Wood used to make furniture etc.

Micro Economics

Inferior Good

  • Inferior goods are goods whose demand decreases as income increases.

    Increase in income causes a fall in demand.

  • E.g. When income of an individual increases, spends less on cheap cloth.

  • Goods are cheap in nature.

    Potatoes, baked beans etc.

Superior Good/ Normal Goods

  • Demand increases as income increases

    • increase in income cause to increase in demand

    • expensive in nature

  • e.g. vacation trips

Luxury Goods

  • Demand increases more than proportionally as income rises.

  • Goods has good quality, durability and remarkably superior in nature.

  • E.g. Gold ornaments

Prestige Goods

  • Goods which give high prestige, status and value these goods are limited in nature

  • e.g. antique collections

Giffen Goods

  • Increase in price causes increase in demand.

  • E.g. Wheat

Complementary Goods

  • Goods which are used together.

  • E.g. Pencil and sharpener

Substitute Goods

  • Goods which can used in place of other.

  • E.g. Pepsi and coke

Refer

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