Types of Goods

Get top class preparation for IEcoS right from your home: Get detailed illustrated notes covering entire syllabus: point-by-point for high retention.

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

Youtube Video Tutorial on Types of Goods

Developed by: