GOODS

BY: ANKITA SHARMA

 GOODS

• IN ECONOMICS, GOODS ARE ITEMS THAT ADD SOME KIND OF BENEFIT TO THE LIVES OF THE
PEOPLE WHO CONSUME THEM. MOST COMPANIES MAKE AND SELL GOODS, WHETHER THEY'RE
PHYSICAL PRODUCTS OR SERVICES THAT CONSUMERS CAN REGULARLY USE.
• IN ECONOMICS, GOODS ARE DEFINED AS ITEMS THAT SATISFY HUMAN WANTS, PROVIDE UTILITY
OR USEFULNESS, AND ARE SCARCE (HAVE LIMITED AVAILABILITY). AN ECONOMIC GOOD MUST
ALSO BE CAPABLE OF BEING TRANSFERRED FROM ONE PERSON TO ANOTHER OR PRODUCED AND
CONSUMED. PEOPLE PLACE AN ECONOMIC VALUE ON GOODS BASED ON THE SATISFACTION THAT
THEY DERIVE FROM THEM. ADDITIONALLY, A MARKET VALUE IS PLACED ON GOODS BASED ON THE
PRICES THAT BUYERS AND SELLERS ARE WILLING AND ABLE TO PAY FOR THEM. SOME COMMON
EXAMPLES OF GOODS INCLUDE FOOD, CLOTHING, CARS, ELECTRONICS, AND FURNITURE
 CLASSIFICATION OF GOODS

BASED ON SUPPLY
BASED ON TRANSFERABILITY
BASED ON CONSUMPTION
BASED ON DURABILITY
BASED ON SUPPLY:
FREE GOOD: A GOOD OR SERVICE THAT HAS NO PRICE IS CALLED A FREE GOOD. THE AIR THAT WE BREATHE SATISFIES
US. BUT WE DO NOT PAY ANY PRICE FOR SUCH GOODS. SO, THESE GOODS ARE FREE GOODS AND THEY ARE NOT
SCARCE. THESE GOODS ARE THE FREE GIFT OF NATURE. THEIR SUPPLY IS MORE THAN THE DEMAND AND ONE CAN
GET TO THE EXTENT THEY NEED. NO EFFORTS ARE NEEDED TO BE PUT FORTH BY HUMANS TO SECURE FREE GOODS.
THEY HAVE VALUE IN USE BUT NO VALUE IN EXCHANGE. E.G. SUNSHINE, RAINFALL, AIR, ETC.

ECONOMIC GOOD: THESE ARE THE GOODS WHICH ARE PRODUCED THROUGH HUMAN EFFORTS AND ARE TO
PURCHASE AT A GIVEN PRICE. SUPPLY IS LESS THAN DEMAND. THEY HAVE VALUE IN USE AND VALUE IN EXCHANGE.
E.G. BUILDING, FURNITURE, GRAINS ETC. SUCH GOODS ARE CALLED ECONOMIC GOODS AND THESE GOODS ARE
SCARCE.

BASED ON TRANSFERABILITY: AS GIVEN BY MARSHALL, GOODS ARE CLASSIFIED EXTERNAL AND INTERNAL GOODS.
EXTERNAL GOODS ARE CLASSIFIED AS MATERIAL AND PERSONAL GOODS. MATERIAL GOODS ARE FURTHER
CLASSIFIED AS TRANSFERABLE (SUCH AS LAND, BUILDING, FURNITURE ETC) AND NONTRANSFERABLE (SUCH AS
DEGREE CERTIFICATE, DRIVING LICENSE ETC.)
PERSONAL GOODS ARE ALSO CLASSIFIED AS TRANSFERABLE( GOODWILL OF BUSINESS) AND NONTRANSFERABLE
(FRIENDSHIP, COURAGE ETC)
INTERNAL GOODS ARE NON TRANSFERABLE LIKE PERSONAL QUALITIES LIKE ABILITY, INTELLIGENCE ETC.)
BASED ON CONSUMPTION

CONSUMER GOODS: THESE ARE THE GOODS FROM WHICH CONSUMERS DIRECTLY DERIVE THE SATISFACTION.
THESE ARE OTHERWISE KNOWN AS GOODS OF FIRST ORDER IN VIEW OF THEIR ABILITY TO GIVE DIRECT
SATISFACTION. FOOD, COSMETICS, CLOTHS, BOOKS, PENS, ETC

PRODUCER GOODS: THOSE GOODS WHICH HELP TO PRODUCE OTHER GOODS. THESE CAN BE USED BOTH BY
CONSUMERS AS WELL PRODUCERS , BECAUSE IT DEPENDS HOW THE GOOD IS USED. FROM THE CONSUMERS’
POINT OF VIEW THEY GIVE SATISFACTION INDIRECTLY. THE EXAMPLES ARE MACHINES, FACTORY BUILDINGS,
RAW MATERIAL, ETC. THE CHANCE OF A PRODUCER GOOD TO BECOME A CONSUMER GOOD IS POSSIBLE BASED
ON ITS USAGE. FOR INSTANCE, ELECTRICITY WHEN USED AT HOME IT BECOMES A CONSUMER GOOD AND THE
SAME BECOMES A PRODUCER GOOD WHEN USED IN AN INDUSTRY.

BASED ON DURABILITY

MONO PERIOD GOODS: THOSE GOODS WHICH ARE USED ONLY ONCE TO SATISFY A NEED ARE CALLED MONO
PERIOD GOODS. THEY CEASE TO EXIST ONCE THEIR USE WAS OVER. E.G. ALL FOOD ITEMS AND PRODUCTIVE
RESOURCES LIKE SEED, FERTILIZERS ETC.

POLY PERIOD GOODS: THOSE GOODS WHICH ARE USED TIME AND AGAIN. RELEVANT EXAMPLES ARE
MACHINERY, IMPLEMENTS, BUILDINGS, ETC.
 MARKET

• IN ECONOMICS, WE DO NOT REFER TO A MARKET AS A PHYSICAL PLACE. ECONOMISTS WILL

DESCRIBE A MARKET AS COMING TOGETHER OF THE BUYERS AND SELLERS, I.E. AN
ARRANGEMENT WHERE BUYERS AND SELLERS COME IN DIRECT OR INDIRECT CONTACT TO
SELL/BUY GOODS AND SERVICES.
 CLASSIFICATION OF MARKETS

ON THE BASIS OF GEOGRAPHIC LOCATION

• LOCAL MARKETS: IN SUCH A MARKET THE BUYERS AND SELLERS ARE LIMITED TO THE LOCAL REGION OR AREA.
THEY USUALLY SELL PERISHABLE GOODS OF DAILY USE SINCE THE TRANSPORT OF SUCH GOODS CAN BE
EXPENSIVE.
• REGIONAL MARKETS: THESE MARKETS COVER A WIDER ARE THAN LOCAL MARKETS LIKE A DISTRICT, OR A
CLUSTER OF FEW SMALLER STATES
• NATIONAL MARKET: THIS IS WHEN THE DEMAND FOR THE GOODS IS LIMITED TO ONE SPECIFIC COUNTRY. OR
THE GOVERNMENT MAY NOT ALLOW THE TRADE OF SUCH GOODS OUTSIDE NATIONAL BOUNDARIES.
• INTERNATIONAL MARKET: WHEN THE DEMAND FOR THE PRODUCT IS INTERNATIONAL AND THE GOODS ARE
ALSO TRADED INTERNATIONALLY IN BULK QUANTITIES, WE CALL IT AN INTERNATIONAL MARKET.
ON THE BASIS OF TIME
• VERY SHORT PERIOD MARKET: THIS IS WHEN THE SUPPLY OF THE GOODS IS FIXED, AND SO IT CANNOT
BE CHANGED INSTANTANEOUSLY. SAY FOR EXAMPLE THE MARKET FOR FLOWERS, VEGETABLES. FRUITS
ETC. THE PRICE OF GOODS WILL DEPEND ON DEMAND.
• SHORT PERIOD MARKET: THE MARKET IS SLIGHTLY LONGER THAN THE PREVIOUS ONE. HERE THE SUPPLY
CAN BE SLIGHTLY ADJUSTED.
• LONG PERIOD MARKET: HERE THE SUPPLY CAN BE CHANGED EASILY BY SCALING PRODUCTION. SO IT
CAN CHANGE ACCORDING TO THE DEMAND OF THE MARKET. SO THE MARKET WILL DETERMINE
ITS EQUILIBRIUM PRICE IN TIME.
ON THE BASIS OF NATURE OF TRANSACTION
• SPOT MARKET: THIS IS WHERE SPOT TRANSACTIONS OCCUR, THAT IS THE MONEY IS PAID IMMEDIATELY.
THERE IS NO SYSTEM OF CREDIT
• FUTURE MARKET: THIS IS WHERE THE TRANSACTIONS ARE CREDIT TRANSACTIONS. THERE IS A PROMISE
TO PAY THE CONSIDERATION SOMETIME IN THE FUTURE.
ON THE BASIS OF REGULATION
• REGULATED MARKET: IN SUCH A MARKET THERE IS SOME OVERSIGHT BY APPROPRIATE GOVERNMENT
AUTHORITIES. THIS IS TO ENSURE THERE ARE NO UNFAIR TRADE PRACTICES IN THE MARKET. SUCH
MARKETS MAY REFER TO A PRODUCT OR EVEN A GROUP OF PRODUCTS. FOR EXAMPLE, THE STOCK
MARKET IS A HIGHLY REGULATED MARKET.
• UNREGULATED MARKET: THIS IS AN ABSOLUTELY FREE MARKET. THERE IS NO OVERSIGHT OR
REGULATION, THE MARKET FORCES DECIDE EVERYTHING