What is an Economic Good?

Learn about Economic Goods with Akshay Kumar

Case Breakdown: Movie Desi Boyz:

The scene that you saw shows, Tanya Mehra (played by Chitrangda Singh) while dancing talks about love. She says love is needed by everyone but everybody doesn’t get it. For those who want it, they would have put some effort in obtaining it. Jerry (played by Akshay kumar) relates this concept of love with an economic good.

In this blog, Learning Perspectives explores the meaning of an economic good.

What is an Economic Good?

Economic good is a product or a service that can be sold for a price. Like Jerry mentions economic good is a consumable item that is useful to people. He goes on to say, this good is scarce in relation to its demand.

Scarcity means any thing that has limited supply. Scarcity creates value for people, hence they are willing to pay for it. For example: There has been supply shortage of onions in India many times. This leads to higher prices. In September 2020, prices of onion increased by 170%. Though there were many cartels that further increase the price. Even though, prices were higher than usual, consumers still purchased onions.

Goods that are free are not considered to be scarce. Natural resources such as air, sea-water etc. Though natural resources are becoming scarce now.

Jerry mentions that “human effort is required to obtain it’, this indicates that free goods are abundant in nature and no real effort is required to obtain it. In case of economic good, one needs to make an effort to buy them. This definition that Jerry mentions is by Samuelson, P. Anthony., Samuelson, W. Economics.

Economic goods are classified into Tangible and Intangible. Tangible means something that can be touched. Jerry relates it to Tanya’s bracelet. Also, any good that can be touched, so apple, mango, kiwi etc are tangible products.

Intangible goods are those that can be felt. Tanya relates it to love in the scene. Information, trademarks, copyrights are considered to be intangible goods.

Types of Economic Goods:

Economic goods are divided on the basis of rivalrous and non-rivalrous. Rivalrous comes from the word ‘rivalry’. This means when one party consumes a good another party has less available for consumption.

Rivalrous are further divided into:

Private Goods:

A good that yields benefits to people. These can include food, clothes, car etc.

Common Goods:

These goods are common or natural or human-made. These goods include timber, coal etc.

Non-Rivalrous are further divided into:

Club goods:

These goods can include private parks, public transport etc.

Public Goods:

Consumers cannot be barred from using such goods. These goods include free open source software, free to air TV

Written by: Ms. Gitika Chandra

 

3 Comments

  1. I аm not sure wheгe yoս are getting yօսr infօ,
    but good topic. I neеds to spend some time learning more
    or understаnding more. Thanks for excellent information I was looking for this info for my missіon.

    • As mentioned in the blog, definition of Economic good is by Samuelson, P. Anthony., Samuelson, W. Economics, which is explained in this post.

      I am glad you liked it.

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