Economic Goods and Ser¬Vices
ECONOMIC GOODS AND SER¬VICES
Economic goods are goods and services that are useful, scarce, and transferable. Economic services are similar to material goods except they are intangible. To be an economic good, a good or service must have utility and satisfy a want. In other words, we consume economic goods to increase our enjoyment or satisfaction, but it is not the nature of the good or service that makes it useful: rather, it is the circumstances involved. Trash, for example, is not an economic good for a household, but it may become an economic good in other sectors of the economy as recycled materials. Scarcity is another essential characteristic of an economic good. Scarcity means that there is not a sufficient amount available to meet everyone's wants, and as a result a price has to be paid to obtain the good or service. If a useful good or service exists in such abundance that anyone can readily obtain it without much effort, it is not scarce and does not have a monetary value. Consequently, it is not an economic good. Under normal circumstances you would not be willing to pay a price for air, but clean air in many places has become an economic good, and a price must be paid for its use. Generally, the greater the scarcity of an eco¬nomic good, the greater its value or price occurs.
If a good is useful and scarce but not transferable, it loses its value as an eco¬nomic good. For example, the gold in seawater is not an economic good, because the cost of extracting it is prohibitive. Certain minerals and metals known to be present in Antarctica are not economic goods at this time because there is as yet no way to extracting and transferring them to a place where they can be have use. Transferability and utility are what give an economic good its value? We can distinguish three principal types of goods: economic goods, free goods, and public goods. We have already seen that an object that is useful, scarce, and transferable is classified as an economic
Economic goods are goods and services that are useful, scarce, and transferable. Economic services are similar to material goods except they are intangible. To be an economic good, a good or service must have utility and satisfy a want. In other words, we consume economic goods to increase our enjoyment or satisfaction, but it is not the nature of the good or service that makes it useful: rather, it is the circumstances involved. Trash, for example, is not an economic good for a household, but it may become an economic good in other sectors of the economy as recycled materials. Scarcity is another essential characteristic of an economic good. Scarcity means that there is not a sufficient amount available to meet everyone's wants, and as a result a price has to be paid to obtain the good or service. If a useful good or service exists in such abundance that anyone can readily obtain it without much effort, it is not scarce and does not have a monetary value. Consequently, it is not an economic good. Under normal circumstances you would not be willing to pay a price for air, but clean air in many places has become an economic good, and a price must be paid for its use. Generally, the greater the scarcity of an eco¬nomic good, the greater its value or price occurs.
If a good is useful and scarce but not transferable, it loses its value as an eco¬nomic good. For example, the gold in seawater is not an economic good, because the cost of extracting it is prohibitive. Certain minerals and metals known to be present in Antarctica are not economic goods at this time because there is as yet no way to extracting and transferring them to a place where they can be have use. Transferability and utility are what give an economic good its value? We can distinguish three principal types of goods: economic goods, free goods, and public goods. We have already seen that an object that is useful, scarce, and transferable is classified as an economic