Goods

An item or product that satisfies human needs, desire, or want and provides utility is called a good in economics. Take an example of a consumer buying something that will help them satisfy that need. Commodities are the term that is also used in place of goods, but the commodity is also referred to as primary goods or raw materials. A common factor differentiating goods from services is that goods are transferable, and services are not transferable. Goods having marginal utility will directly or indirectly increase or decrease their utility.  

Types of Goods

Some goods are important and useful but are not scarce enough to have monetary value, like air or sunlight. Such goods are termed as ‘free goods’. Whereas, an ‘economic good’ scares enough to its demand so that the consumer puts effort into purchasing it.  

Goods that are owned privately by the people like wallets, laptops, mobiles, furniture, and almost anything that is being used by the consumer on a regular basis which is not food-related are ‘Private goods’.  Any item which is consumed and not used in production for another good like a fridge or TV, these items are sold to consumers as the ultimate good. 

These are called consumer goods or ‘final goods’, while the goods sold to a consumer to further be used in the production of other goods are called ‘intermediate goods’. Textiles are intermediate goods, as they are further used in making other goods. Physical products that are produced and then made available in the market for consumption are called commercial goods. Tractors and commercial vehicles are commercial goods. Information is an intangible form of good.  

Raw materials

The input goods or the inventory goods that a company needs to produce the final goods are called raw materials. For example, raw materials include a wide range of varieties like steel, fabric, gasoline, lumber, coal, and more. 

There are mainly two types of raw materials: indirect raw materials and direct raw materials. Indirect raw materials are those that are not a part of the final product but are part of the manufacturing process. Direct materials are those materials that are directly used in the production of the final product, like wood and lead in a pencil. 

Work in Progress Goods

The raw materials, labour, machinery, and other cost factors of products that are used at various stages of the production of goods are called work in progress goods.

Finished goods

A finished good is a complete manufactured good that is ready to be sold in the market. The goods that are sold to the customer after completing the manufacturing process are called merchandise. 

Classification of Goods

Different Goods can be classified by the following factors: tangibility and relative elasticity. An intangible good like information is different from a tangible good like mobile because intangible goods are physically impossible to hold, whereas tangible goods physically occupy space. Goods can be differentiated on the basis of price elasticity. 

A good is referred to as an elastic good if there is a relatively large change in quantity due to the relatively small change in price. These goods come under the group of substitute goods; for example, if the coffee prices rise, then the consumer will start consuming more tea. In the case of inelastic goods, there are few substitutes to replace, such as a concert ticket artwork from a particular artist.  

There are some goods that consumers use together, like bread and butter; if the price of butter rises, there is a chance that the demand for bread will decrease despite no change in bread price; such goods are called complementary goods. Complementary goods are inelastic. 

White Goods

Large home appliances like stoves, fridges, washing machines, driers, air-conditioners, and more are known as white goods. Initially, all these goods were only available in white colour hence the name white goods, though now they are available in a wide range of colours. 

Define Normal Goods and Inferior Goods

Goods that increase in demand with the increase in income are called normal goods, and as food and clothing, there is a positive correlation between income and demand for Normal goods. 

Inferior goods are the opposite of normal goods; the demand for these goods decreases when income increases. Goods that benefit all the members of society are called public goods or social goods. Public goods include the dam, national security, street lighting, etc. 

Conclusion

Commodities are the term that is also used in place of goods, but the commodity is also referred to as primary goods or raw materials. An item or product that satisfies human needs, desire, or want and provides utility is called a good in economics. Take an example of a consumer buying something that will help them satisfy that need. Large home appliances like stoves, fridges, washing machines, driers, air-conditioners, and more are known as white goods. 

Goods that benefit all the members of society are called public goods or social goods. Public goods include the dam, national security, street lighting, and more. An intangible good like information is different from a tangible good like mobile because intangible goods are physically impossible to hold, whereas tangible goods physically occupy space. Goods can be differentiated based on price elasticity.