Goodsand Services

Goods1. Goods are tangible i.e. they can be seen and touched.

2.There is a time gap between production and consumption of goods.

3.They can be stored and be used later.4. They can be transferred from one place to another.

Services1. They are not tangible i.e. they can neither be seen or touched.

2. There is no time gap between production and consumption.

3. It cannot be stored.

4. Transfer of service is not possible. You can touch the teacher but not what she is teaching.

E.g.The teacher is teaching and you are learning, Production and consumption is taking place at the same time.

You cannot store her teaching nor transfer what she is teaching now.

This is a service the teacher is giving you.

Classification of Goods and ServicesFree Goods Economic Goods

E.g. Sand

Desert SandSand at a construction site

This is free and available in plenty i.e. unlimited quantity of sand is there

This not free and you have to pay for this sand. You get sand for how much you have paid, if you want more sand you need to pay more money.

1. It’s a free gift of nature.2. Available in plenty. Not scarce.3. It has uses but you don’t have to pay

for it.4. Their supply is more than their

demand.5. They are Free Goods.

1. They are not free.2. They are scarce.3. It has uses and you have pay for it. 4. Their demand is more than their supply.5. They are economic goods.

and

Free Services and economic Services

Free Services are those services that cannot be bought in the market. For e.g. Parents love their children. Mothers cooking for her family.

Economic services :All those services, doctor, teacher, engineer, bank officer, cobbler, etc.,have to be bought in the market. These services are called economic services.

Consumers are people who buy things for their direct consumption.

Consumer goods and Producer Goods

Consumer goods are those goods that satisfy the wants of a consumer directly.

This lady has bought goods to cook for her family. I.e. this is for direct consumption. This is an example of a consumer good.

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This man is buying goods to cook in his hotel. The food he cooks will be consumed by people who visit his hotel. So he is buying not for his direct consumption but for the consumption of his customers. This is an example of producer good.

Producer goods are those goods, which satisfy the wants of a consumer indirectly.

Intermediate goods

Raw materials, Fuels, power, machinery etc. are used by Producers

for further production of final goods and services,

these are called intermediate goodsE.g

Final good (shirt)Intermediate goods used by producer to produce goods

Consumer services and

When the consumer or the household directly uses services, to satisfy his/her wants, they are known as consumer services.

For e.g. a tailor stitches your shirt

or a doctor treats your sickness

a plumber repairs the leak in your house.

Producer services

Producer services, are services used by the producer

to help him in producing goods for the consumer. For e.g. A tailor stitches shirts for a garment shop, where they

will be sold to the customers.

A truck carrying raw materials to the factory for production.

Single use and Durable useSingle Use GOODs

Single use consumer goods are goods that can be used only once by a consumer e.g. Bread, milk, egg, fruits etc.

Single use producer goods are goods that can be used only once in the production process. E.g. Raw materials like sugar cane in the production of sugarcane juice, Once this sugar cane is crushed for its juice it cannot be used again.

Durable USE GoodsDurable goods are those goods that can be used again and again for a long time.

Consumer durable goods Producer durable goods

e.g. T.V, Fridge, cloth, furniture etc. Machines, Tools, tractors, etc.

Private goods and Public goods

Goods can be classified on the basis of their ownership.

Private GOODsAll Goods that are privately owned and are only enjoyed by individuals are called Private goods.

• E.g. Your watch is your private good.

• If you own a factory that is your private property.

• Private garden

Public goods

Public goods are those goods

which are owned and enjoyed

by the society as a whole.

For e.g. Public garden, public halls etc.

Significance of goods and services in an economy

Goods and Services have many roles to play in an economy.

Their role can be stated in relation to:

1. Human Wants : If availability of Goods and Services increases, more human wants will be satisfied. i.e More Goods and Services, More wants are satisfied.

More goods More satisfaction

2. Production:More goods and services

will depend upon availability of producer Goods and Services.

e.g.We can produce more

if we have more and better machinery, raw material, banking services etc.

Thus availability of consumer goods and services depends upon the quantity and quality of Producer’s goods and services.

3. Investment: If production of goods and services are more,

consumption will be more

and investment will also be more.

Production

Consumption

investment

Ex. 1

1.Which of the following are goods.

A. car b. cell phone c. Mending of shoesd. Transportation of passengers

2. Out of the following, which are the characteristics of a good.

a. Goods can be seen or touched

b. Goods cannot be transferred

c. There is no time gap between the production and consumption of goods.

3. Out of the following, which are the characteristics of services.

a. Services can be seen or touched

b. Services can be stored.

c. There is no time gap between the production and consumption of Services.

4. Human wants are satisfied by consuming.

d. Goods

b. Services

c. Both goods and services.

d. None of the above.

EX.2Which of the following are correct.1. Economic goods are:A. Those which are scarce.B. Those which have a price.C. Those which are scarce and have a price.

2. Consumer goods are those goods:a. Which help in further production.b. Which satisfy human wants directly.c. None of these.

3. Examples of producer goods are :d. Machinerye. Tractor.f. Breadg. Raw material

4. Which of the following statements are correct?h. Free goods are those goods whose supply is more than demand.i. Single use goods, which are used only once.j. Durable use goods can be used again and again.k. Pubic goods are those goods which are collectively (together by all) owned.

The End of chapter 3 goods and services