- Final good Goods used for final consumption.
- Used by the end-consumers/users. It satisfies customer’s wants directly
- Known as final goods because once it has been sold it passes out of the active economic flow.
- No further transformation is made by any producer.
- May undergo transformation process by purchaser but that is not come under economic activity as it doesn’t yield anything.
- E.g.: tea leaves used at home to make drinkable tea, milk etc.
- Consumed by ultimate consumers
- Non-durable: perishable in nature, e.g. food, clothing etc.
- Consumer-Durable: car, furniture, television etc.
- machines, implements, tools
- E.g. Printer
- Make the production of other commodity feasible.
- Durable in nature
- Goods that are used for further production is called intermediate goods also called inputs.
- It is further goes into transformation process.
- It adds earning in active economic activity.
- Tea leaves used by restaurant to make drinkable tea
- Therefore, Types of goods is not depending on nature of goods but it depends on economic nature of its use.
- Goods used for the production of other goods
- Goods used by producers as material inputs
- Plants, machinery, factory
- E.g. cotton yarn used to make cloth,
- Wood used to make furniture etc.
B) Micro economics
- Inferior good
- Inferior goods are goods whose demand decreases as income increases.
- Increase in income causes a fall in demand.
- E.g. When income of an individual increases, spends less on cheap cloth.
- Goods are cheap in nature.
- Potatoes, baked beans etc.
Superior good/ normal goods
- Demand increases as income
- increases increase in income cause to increase in demand
- expensive in nature
- e.g. vacation trips
- Demand increases more than proportionally as income rises.
- Goods has good quality, durability and remarkably superior in nature.
- E.g. Gold ornaments
- Goods which give high prestige, status and value these goods are limited in nature
- e.g. antique collections
- Increase in price causes increase in demand.
- E.g. Wheat
- Goods which are used together.
- E.g. Pencil and sharpener
- Goods which can used in place of other.
- E.g. Pepsi and coke