Economics

Types of Goods : Economics

A) Macroeconomics

• 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.

Consumption goods 

• Consumed by ultimate consumers 
• Non-durable: perishable in nature, e.g. food, clothing etc.
• Consumer-Durable: car, furniture, television etc. 

Capital goods

• machines, implements, tools
• E.g. Printer
• Make the production of other commodity feasible.
• Durable in nature

Intermediate good

• 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 

Luxury goods

• Demand increases more than proportionally as income rises.
• Goods has good quality, durability and remarkably superior in nature. 
• E.g. Gold ornaments

Prestige goods 

• Goods which give high prestige, status and value these goods are limited in nature 
• e.g. antique collections

Giffen goods 

• Increase in price causes increase in demand. 
• E.g. Wheat

Complementary goods 

• Goods which are used together. 
• E.g. Pencil and sharpener

Substitute goods

• Goods which can used in place of other.
• E.g. Pepsi and coke