Economic Goods: Definition, Types, and Examples

Examples of economic goods – In economics there are three types of goods that can be used by humans to support their survival. The three types of goods are economic goods, illith goods, and free goods.

All three have different meanings and characteristics. However, because there are items that are limited. Maybe you won’t be able to enjoy the item continuously.

Maybe of the three terms, you will hear more about economic goods. For this reason, so that you also understand more, this article will explain about economic goods, starting from the definition, examples of economic goods, the difference between economic goods and free goods and several other things.

For that, for those of you who want to know more about economic goods, please read the reviews in this article.

Definition of Economic Goods

Before discussing examples of economic goods. It would be better if you also know what economic goods are. Economic goods are goods that can meet human needs but in limited quantities.

This limited word refers to the amount of goods that is less than the amount needed by society. Due to the limited availability of these goods, humans will make sacrifices to be able to get these goods.

Sacrifices that can be made to achieve economic benefits are the obligation to spend money, time or mind. The availability of these goods is obtained in two ways, namely produced by human labor or indeed goods provided by nature and can be used free of charge.

You can get these items at markets, convenience stores or other types of retailers. Even so, business people want to strengthen their company’s position in field or market conditions. Most of these companies will use a positioning strategy .

This positioning strategy is a company’s effort to strengthen their image in order to get a special place according to their target market.

Types of Economic Goods

As previously explained, economic goods are goods that have a lower price and supply than market demand. Economic goods products also require scarce valuable resources that can provide alternative uses.

An example is the limited availability of land capable of producing rice and sugar cane. If indeed a farmer wants to produce large products. So these farmers have to sacrifice sugarcane production.

So that it can also be called economic goods which have a relationship with the problem of saving scarce resources in order to fulfill human needs or desires.

In this explanation it can be interpreted that all material goods are economic goods. Today there are several types of economic goods. If indeed you do not know the types of economic goods. Then the explanation below will more easily help you to know more about the types of economic goods.

1. Consumer Goods

Consumer goods are final goods that can directly satisfy the desires of consumers. These goods include bread, milk, clothing and medicine.

In addition, consumer goods are still divided into two groups. The two groups are disposable consumer goods and durable consumer goods.

a. Disposable Consumer Goods

Single-use consumer goods are goods that can be used up in one act of consumption. For example, food, cigarettes, matches and fuel. These goods also fall into the category of direct consumption goods.

This is because these goods are able to provide satisfaction for human desires. In addition, disposable consumer goods also apply to various types of services, such as doctors, lawyers and waiters, which are also included in disposable goods.

b. Durable Consumer Goods

Meanwhile, durable consumer goods are goods that can be used for a long time. The time period used is not so important, whether it is a short term or a long term. For example, clothes, television, pens and so on, which have a long shelf life.

2. Capital Goods or Manufacturers

Next there are types of capital goods or producers. Capital goods are goods that can help in the production process of other goods. The goal remains the same, namely to satisfy consumer satisfaction directly or indirectly.

Some examples of capital goods or producers are such as machinery, plants to agricultural and industrial raw materials and so on.

Capital goods or producers are still divided into two groups, namely disposable producer goods and production goods that can be used for a long time.

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a. One-use Manufacturer’s Goods

Disposable producer goods are goods that will be used up in one act of production. This means that when used once, the manufacturer’s goods will lose their original shape. For example, paper is used to print books and coal is used for factory needs.

b. Durable Manufacturers Goods

Durable manufactured goods are goods that can be used repeatedly. When used for a long time over and over again, the item will not lose its usefulness directly.

An example is capital goods such as machinery, factories, building equipment factories and so on.

Some of the points explained above are examples of economic goods. The difference between consumer goods and capital goods is seen from their use. Some examples of goods such as electricity and coal are examples of goods that can be used as consumer goods as well as capital goods.

Then the difference between disposable goods and durable goods also has important meaning from an economic point of view. The demand for disposable goods is considered to be more regular and stable as well as predictable in advance.

Examples of Economic Goods

The next explanation is an example of economic goods. Currently there are many examples of goods or services that are classified as types of economic goods. Even these economic goods you may have found easily in the environment. Some examples of economic goods are as follows.

1. Clothing

The first example of an economic good is clothing. Clothing is one type of item that is really needed by humans. The number of these clothing products is usually limited.

Besides that, to be able to get this clothing product requires a sacrifice and also competition with other people. Because of this, clothing products are included in the class of economic goods.

Even if you have a question in your mind why clothes, which are still available, are included in the class of economic goods. Back again, as explained earlier, in economics, a lot and a little is something that is so relative.

However, for clothing products to be included in the class of economic goods, what must be emphasized is the method of production and the process of obtaining them. For the production of clothing requires limited materials.

Whereas someone who wants to get clothes also requires sacrifices such as materials, money, effort, time and even competition with other people who both want these clothing products. Therefore clothing products are included in the class of economic goods.

2. Food or Beverage

The next example is food and drink. Food and beverages are included in the category of economic goods because they are seen from the process of obtaining them. Humans need a certain effort to be able to get food and drink.

Some of the sacrifices made by humans in obtaining food and drink is to carry out the purchasing process by spending money. Then humans also have to carry out the processing and also look for raw materials for these foods and beverages.

3. Residence

The next example is housing. Habitable dwellings that have a limited number make them fall into the category of economic goods. Apart from that, the process of getting a place to live has also made it into the category of economic goods.

The reason is that humans have to make certain efforts to be able to get a place to live, such as spending money. The residence referred to here can be privately owned permanent residences or temporary residences such as boarding houses or rented houses.

To be able to get a permanent residence that is privately owned, a person must be able to spend a certain amount of money, building materials such as wood, cement, sand and others if you really have to build it from scratch. Then for temporary housing such as boarding houses or rented houses, you also need money to be able to occupy it.

Because using these costs makes a place to live into the category of economic goods.

4. Health Services

Previously, many examples of economic goods were explained in the form of physical goods or products. Then the next example is in the form of services. An example is health services or doctor services.

This can be seen from the very limited number of practicing doctors currently available. So to use their services requires certain efforts such as queuing and also paying special fees.

Then to become a doctor also requires a lot of effort and sacrifice, such as costs, time, thoughts to be able to get expertise and also a doctor’s degree.

Until now, in fact, it is not only doctors’ services that are included in economic goods. However, many other services also fall into the category of economic goods.

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This is because when someone needs the help of a service. So they have to spend certain efforts or sacrifices such as spending money.

Definition of Free Goods

Not only economic goods, in economics there are also free goods which are also very much needed for human survival. When viewed from its understanding, in general economic goods are goods that can be obtained by humans without the need to use certain efforts or sacrifices.

This is because free goods have an unlimited amount and have been provided by nature in greater quantities than the amount of human needs.

The easiest example of a free good is air or oxygen. Humans need air or oxygen to survive. In the process of obtaining it, humans do not need to make certain efforts or sacrifices. However, it is possible that the category of free goods can bear status because special handling is needed for these goods.

An example is oxygen, which humans can use freely without any effort, which can result in status for people with health problems. The reason is that those who experience health problems in breathing may need special oxygen which must be treated with certain treatment before use.

The difference between economic goods and free goods

In economics, goods are divided into several types depending on the factors that are in it. Two of them are economic goods and free goods. Previously it has been explained related to what economic goods are.

At this point, the difference between economic goods and free goods will also be explained. One of the differences between economic goods and free goods lies in the completeness of the commodities.

Both free goods and economic goods, both of which are needed by humans to fulfill their needs in life. Actually these two types of goods are not always in the form of commodities, but can also be in the form of services. For more details, here are some differences between economic goods and free goods.

1. Quantity of Goods

The first difference between economic goods and free goods lies in the quantity of these goods. Economic goods have such a limited quantity. Meanwhile, free goods have an unlimited amount.

The limited number of goods can also be called the scarcity of goods. From this it can be concluded that economic goods have fewer or more limited quantities.

However, for this small amount, it is still quite relative or requires a comparison. Comparison of the limitations of goods is from the number of human needs associated with these goods.

You could say if human needs have a limited amount. Therefore, as long as the availability of goods is able to meet these unlimited human needs. Can be interpreted if the goods are free goods.

And vice versa if an item cannot meet unlimited human needs. Then these goods fall into the category of economic goods.

2. Production Process

The second difference between economic goods and free goods lies in the production process. Economic goods require a certain effort for the process of getting them or the production process.

The existence of factors requiring effort in obtaining them makes economic goods not mass-produced in unlimited quantities. In the production process, economic goods have their own limitations so that these goods have a limited quantity.

As for free goods, you can use them without the need to use economic resources. As the easiest example of free goods is the sun’s heat and air.

Not only has an unlimited number of course. However, both sunlight and air can be used by humans without the need to carry out the production process first.

3. How to Obtain

The third difference between economic goods and free goods is seen from how to obtain them. To be able to get free goods does not require a particular effort. Meanwhile, economic goods require sacrifice or competition to get them.

Having an unlimited amount is the factor that makes free items not require special effort to obtain. Conversely, for economic goods that have a limited amount, it must require a sacrifice or competition first to be able to get them.

From some of the explanations above, it can be seen how the difference between economic goods and free goods. Although both are needed for human survival, both free goods and economic goods have differences as explained above.

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Author: Hendrik

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