What Is Economic Goods?

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In economic debate, economics considers the production, distribution and consumption of goods as the basis of the economy. In economics, products are objects that meet human wants. The distribution of goods and services is the process by which individuals gain advantage over others through the exchange of their produced goods and services for the services rendered to them. In economics, one can speak of economic good because it refers to a product that is not produced in excess and gives the user a gain. The end-product is marketed as capital goods or as surplus or wealth.

In economic terms, money is a medium of exchanging different goods and services and is usually obtained in the form of bank notes, currency, or deposits at banks. The money is the unit of exchange in a market. Money acts as the standard of value in a market. Economic goods refer to those things that give users a definite advantage over others for the purpose of obtaining a specified standard of reward. Such advantage may come from production, employment, technology, education, innovations, savings, production and technology.

Production goods are the producers’ means of livelihood such as houses, farms, mines, crops, etc. Employment goods refer to those means of employment such as skilled workers, white-collar workers, technicians and other forms of workers employed in production. Technology goods refer to those things that produce the means of communication and transportation.

Distribution is not as important in economics as production and employment. But distribution affects production and employment indirectly. It influences the market distribution of wealth. There are three broad theories on economic good: Efficiency, Utility, and Market. Each theory is a guide to how society should be organized to ensure the widest distribution of goods.

Efficiency refers to a system where production, employment and distribution are all connected with each other and work on the same principles. This implies that there is equal opportunity to supply goods and services. By this, production, employment and distribution are linked with one another and, consequently, everyone has the same chances of success. An economy is considered efficient when all economic activities are interlinked. A market economy is a market economy in which prices are free to compete for the best goods at the right places at the right time.

Utility is an economic good based on pleasure and desire. Thus, economic good like money, wealth or credit are considered good because people want to have them. They satisfy a basic need and contribute to the quality and happiness.

A concept called “utility” describes the contribution of things to our satisfaction. Economics considers “utility” as the standard of what is economic good for a human being. It therefore follows that if a human being wants to consume X he has to produce Y. Therefore, production, employment and distribution are interlinked and everyone has an equal chance of getting what is economic good for him.

Money, unlike the other economic goods, has a natural supply. Production of money depends on the demand for it by the public and the production of money depends on the supply of it. The general theory is that, the more there is a deficit in production, the less there will be demand for money. However, money is not produced in abundance; in a recession, more money will be needed than can be produced.

Money, unlike other goods, has a natural, scarcity value. Unlike food, which is harvestable and sold, money is something that is not produced or grows on trees. It cannot be reproduced or manufactured artificially. The idea of what is economic good for an individual or group usually depends on the degree of scarcity in the economy.

In a society with private property, money and other goods are produced and stored in private property. Money is part of a particular society. Since money represents a particular society, it is not produced or stored outside a particular society. Thus, money and all the economic goods that it represents are not natural. What is economic good for some may not be good for others.

What is economic good for me may not be good for you. Economics depends on individual choices. So, why believe that what is economic good for you is economic good for me? Why assume that what is economic good for my neighbor, is necessarily economic good for me?