Goods Definition

posted in: Microeconomics | 1

Goods definition

Goods are a means of satisfying needs . Whoever acquires a good, does so with the expectation that it gives him a benefit. For this reason, he is also willing to pay a certain price for it.

Goods have a

  • Basic use,
  • Additional use,
  • Overall use,
  • Average,
  • And border use.

Basic and additional use

Goods have a basic use. Water quenches thirst, bread quenches hunger . Frequently, however, goods also have an additional benefit . Beer, for example, not only cleans the thirst, but also creates a moody mood and ultimately makes you drunk.

Total and average use

The total quantity of a good, such as six bottles of beer, provides a total benefit. The enjoyment of six bottles of beer can be forgotten by everyday stress ( the consumption of an excessive quantity of beer is, of course, discouraged ). By dividing the total use by the number of partial quantities, the average benefit is obtained. This means that the consumption of a bottle of beer reduces the daily stress by one sixth.

Border use

The increase in the quantity of the goods by one unit, ie the useful growth, is referred to as the limit value. The first bottle of beer is the best . It leads to greater satisfaction. The second beer already contributes less to alleviate the worries. So it has a smaller limit. When drinking the rest of the beers, the limit is decreasing . Another beer would presumably lead to drunkenness and thus has no longer any limit. Rather, it would lessen the overall benefit of all previously enjoyed beers (reference: 1. Gossen’s First Law – according to Hermann Heinrich Gossen – the relationship between the consumption of a good and the satisfaction.).

There are different types of goods:

  • Free and economic goods
  • Material and intangible goods
  • Consumer goods and investment goods
  • Consumables and consumer goods
  • Public and private goods
  • Meritorious and demeritory goods
  • Complementary and substitutive goods

 

One Response

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