Good (economics and accounting)

From ArticleWorld

Goods is the term used to define any object or service that can be bought or sold in the market for a price. It includes all things (including especially manufactured goods) which are movable at the time of identification. Good is generally distinguished from a service in that a service is intangible while a good has a physical identity and its ownership may be transferred.

Economics of goods

Goods follow the rule of diminishing marginal utility i.e. more of a thing one has, the less he/ she wants more of it. The first car a person buys gives much more satisfaction than the fourth or the fifth. A good is supposed to increase the utility of its consumer, hence the consumer would like to consume as much of the good as possible.

The distinction between good and bad is that bad decreases the utility of its consumer, hence a consumer would not like to possess a bad. For example diseases are bad hence it would pay to keep diseases away or since health is good, it would pay to keep in good health. It has been argued that no good has zero utility for the consumer, i.e. regardless of the quantity, there will always be a positive utility for a good.

Kinds of goods

Based on their characteristics, there may be many categories of goods.

1. Durable goods and non-durable goods;
2. Final goods and intermediate goods;
3. Consumer goods and capital goods;
4. Free goods and scarce goods;
5. Collective goods/ common goods and private goods and
6. Complement goods and substitute goods.