TYPES OF GOODS

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CONSUMER GOODS AND
PRODUCER GOODS
Goods used for final consumption is
called Consumer goods
E.g.: Food, Home, Car

Goods used for producing other goods is
called Producer goods
E.g.: Plants, Machinery, Factory
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Consumer Goods satisfy consumer wants
directly

The analysis used to study consumed goods
is called Demand/ Revenue analysis
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NON DURABLE GOODS
According to Laymen, goods perishable
after use are called non durable goods

Later new economic definition came;
Goods perishable after one use.
E.g.: Bread, Milk

Purchased at regular intervals
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Only current demand to be met,
corresponding to current conditions.

Serviceability not generally required

Classified into perishable and non
perishable goods

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Perishable goods are lost after a time
E.g.: teaching service, doctors service etc

Non perishable goods are not lost after a
period of time
E.g.; Coal
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DURABLE GOODS
Goods being used for a continuous period of
time
E.g.: TV, fridge

Requires special facilities to use, like fridge
needs electricity

Consumed by more than one person
Serviceability is required
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NORMAL GOODS
A goods whose demand increases when
income increases.

Its price remains same
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INFERIOR GOODS AND
SUPERIOR GOODS
Inferior goods are goods whose demand
decreases as income increases

It has negative elasticity of demand

E.g.: A man who has had a recent salary hike
pays less on cheap dress
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Superior goods are goods whose demand
increases as income increases

It has high positive elasticity of demand
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The curious case of Sir Robert Giffen
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In Ireland people used to consume more
potatoes(inferior goods) and less meat using
their miniscule daily budget

During a famine when cost of potato was
increased it was found that the consumption
of potato has been increased
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This phenomena defined the law of demands
of then and was called Giffen good, here the
people buy more of it as the price rises.
Thereby, violating the law of demand.
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LUXURY GOODS
In Economics, a luxury good is a good for which
demand increases more than proportionally as
income increases.

It has a high elasticity of demand. It can be
classified as different kinds of goods based on
income levels.

Their durability, quality, performance are
superior to other substitutes
e.g.: Gold ornaments
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PRESTIGE GOODS

Goods which have high status and value

E.g: Antique collection, Limited edition goods

Bought by richest section of people

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COMPLIMENTARY GOODS
A goods demand is increased when the price
of another good is decreased

It has negative cross elasticity of demand

E.g.: Bread and butter in our everyday world.
Club goods
Club goods (also artificially scarce goods) are a
type of good in economics, sometimes
classified as a subtype of public goods that are
excludable but non- rivalrous, at least until
reaching a point where congestion occurs.
These goods are often provided by a natural
monopoly. Club goods have artificial scarcity.
Club theory is the area of economics that
studies these goods

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Common goods
Common goods are defined in economics as
goods which are rivalrous and non-excludable.
Thus, they constitute one of the four main types
of the most common typology of goods based on
the criteria:
whether the consumption of a good by one
person precludes its consumption by another
person (rivalrousness)
whether it is possible to exclude a person from
consumption of the goods (excludability)
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Private good
A private good is defined in economics as "an
item that yields positive benefits to people
"that is excludable, i.e. its owners can exercise
private property rights, preventing those who
have not paid for it from using the good or
consuming its benefits; and rivalrous, i.e.
consumption by one necessarily prevents that
of another. A private good, as an economic
resource is scarce, which can cause
competition for it.
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Public good
In economics, a public good is a good that is
both non-excludable and non-rivalrous in that
individuals cannot be effectively excluded
from use and where use by one individual
does not reduce availability to others.
Examples of public goods include fresh air,
knowledge, lighthouses, national defence,
flood control systems and street lighting.
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Merit Goods & Demerit Goods
Merit Goods. Goods which people may
underestimate benefits of. Also often has
positive externalities, e.g. education. See:
Merit goods
Demerit Goods. Goods where people may
underestimate costs of consuming it. Often
has negative externalities, e.g. smoking, drugs.
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Exceptional goods
Veblen / Snob Good. A good where an
increase in price encourages people to buy
more of it. This is because they think more
expensive goods are better.

Free Goods A good with no opportunity
cost, e.g. breathing air. See: Free good
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