Goods, Service & Price Flashcards
Goods
Physical product that can be purchased
Service
Labour that can be purchased
Excludable
Need to be purchased for use
Rival
Purchase reduces the availability for other customers
Private goods
Excludable (need to be payed) and rival (consumption reduces availability)
What good is a limited-edition shirt
Private
Common goods
Non-excludable (cannot be payed), but rival
What good is fishing in international waters? (no payment, but reduced numbers)
Common
Club goods
Excludable (must be payed), but doesn’t reduce the amount left
What good is a Netflix membership? (needs to be payed, but everyone can have it)
Club
Public goods
Available to everyone, and non depleted by use;
Non-excludable, non-rival
What good is air, education?
Public
What good is a wild flower? (free, but depeleted)
Common
What good is a Starbucks coffee
Private
Price
An exchange of goods and services for money.
Barter exchange
Direct exchange of goods, perceived as the same value.
What factors influence the price?
Consumer demand, competing brands, legal restrictions and cost of production (capital, land, labor, entrepeneur)
Monopoly
Exclusive possession dominance of a commodity by one firm; Absence of competition. Can often lead to fixed prices.
Snob appeal
Illusion/belief that purchase of a good can elevate one’s social status
