Goods and it's Types

 

Goods

Goods are the items that satisfy human wants and has utility.

Types of Goods

1.     Public Goods

It is a product that can be consumed by one individual without reducing its availability to other and from which no one is deprived.

Eg: Law enforcement, National defense, public parks, sewer system

Characteristics of Public Goods:

a.      It is non-rivalry which means it doesn’t decrease in supply as people consume them.

b.     It is non-excludability.

c.      It suffers from the free rider problem.

2.     Private Goods

It is the good that must be brought or purchased to be consumed and consumption by one individual prevents another individual from consuming it.

Characteristics of Private Goods:

a.      A private good can only be used or consumed by one party at a time which means it is rivalry.

b.     It must be bought in order to consumer making it excludable.

c.      The company produces private goods to earn profit.

3.     Common Resources

It is rivalrous and non-excludable. Anyone has access to the good but the use of the good by one person reduces the ability of someone else to use it.

For eg: Fish stocks in the water resources; no one is excluded from fishing but as people catches fishes without limits being imposed the stocks for the later fishermen are potentially deplteted.