Types of goods commerce notes.

Goods are tangible items which yield satisfaction to a user. They are also called commodities.

Free goods. These are goods provided in abundance by nature and can be obtained at zero price e.g. sunshine, rainfall, fresh air etc.

Economic goods. These are goods that are relatively scarce and they are paid for. They have the following characteristics.

• Provide satisfaction
• Are relatively scarce
• Have monetary value.

Public goods. These are goods which when provided for a particular group of individuals become available for others at zero or no extra cost and the consumption by one individual does not reduce the amount available to others. They have the following characteristics;

• Mainly provided by the state or government.
• Non-excludability .i.e. the consumption by one person doesn’t exclude the consumption of the same good by other people.
• Non-appropriability .i.e. they are available to all individuals
• Non – rivalry (exhaustibility) one person can increase his satisfaction from the commodity without reducing that obtained by others.

Examples of public goods include roads, bridges, street lights etc.

Merit goods. These are goods that are considered intrinsically desirable and consumers are encouraged to use them. Their public benefit exceeds their private benefit. Examples of merit goods include public education like Universal primary education, public health etc.

Private goods. These are goods enjoyed exclusively by a single individual. The act of consuming a good by a single individual excludes others. They have utility and a market value (price)

Final goods. These are goods ready for use by final consumers

Producer (capital) goods these are goods desired for the production of other goods e.g. machinery, capital equipment, raw materials etc. Producer goods are sometimes called goods of second order.

Intermediate goods. These are goods which have not yet reached their final stage of production e.g. Lint for clothes, baking flour for bread.

Giffen goods. These are staple food stuffs mainly consumed by low income earners whose consumption increases with increase in their prices.

Inferior goods. These are goods whose consumption reduces with increase in consumer’s income. They have negative income elasticity of demand.

Original goods. These are gifts of nature e.g. Land, mineral deposits etc.