Economic goods are tangible or intangible items that fulfill an economic need and are in limited supply, useful, and transferable. Free goods like sunlight and gravity are not economic goods. The economic value of a good is determined by its supply and utility in satisfying an economic need. Economic consumer goods are purchased by end-users, while trade economic goods are purchased by retailers for direct resale to consumers.
Economic goods are typically considered tangible items that fulfill an economic need. An economic want is something that can be satisfied by barter or financial exchange. These items must be in limited supply, useful and transferable. Intangible items such as stocks and services can also be considered economic goods if they are performed for lease.
Things that are freely available, like sunlight and gravity, are not economic goods. These types of items are often referred to as free goods. While these items can be of great use, their abundance makes an economical trade-off for needlessly protecting them. The limited supply of an item helps establish the cost that must be paid to secure its possession.
An item’s utility is its ability to satisfy an economic need. It can be a technical specification or a subjective judgment. How well an item satisfies the need and availability of that item determines its economic value. The perfect item might be in short supply, while there is still a range of less acceptable items in greater supply. In this situation, the ideal item would be expensive and the less useful items more affordable.
An item can be scarce or in limited supply and also the perfect thing to satisfy a craving. If the item is not transferable through an exchange, it is not an economic good. It could not come into possession of the individual with economic desire. If an item exists but is not for sale, it is non-transferable and therefore not an economic good. The same would be true if it were not physically possible to carry out the transaction.
Economic consumer goods are those that are purchased and taken into possession by the end user. These can be tangible items or intangible services. A washing machine is a tangible item, the services of a washing machine repairman are an intangible. The economic value of a good is determined by its supply and utility in satisfying an economic need. This desire can be a highly subjective thing, depending on individual perception and taste.
Trade economic goods are often items purchased by a retailer for direct resale to consumers. They can also include the machinery, raw materials, and services required to manufacture consumer goods. The values of these items are determined more empirically by technical requirements and physical availability. On the other hand, the values of consumer economic goods are subject to manipulation by suppliers. Economic need can be influenced by advertising and availability by production quota.
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