Types of Good Flashcards
To define the different types of good in the economy.
Demerit good
The negative effects on the population are greater than the negative effects on the consumer (when consumed). Negative externalities. (Generate negative externalities when consumed)
Private goods
Excludable and rival
Economic goods
Have an opportunity cost in production.
Free goods
No opportunity cost in production
Consumer goods
Satisfy the demand of an individual
Capital goods
Any good used in the process of making another good
Perishable goods
Goods that have no economic value after a certain time period.
Durable goods
Goods that will not perish.
Nokia phone!
Giffen goods
Very basic goods consumed by low income groups. Negative IED.
Veblen goods
Where demand increases as price increases
Inferior goods
As income increases, demand falls. Negative IED.
Normal goods
As income rises, demand rises. Positive IED.
Complementary goods
Negative XED. Require the other to work.
Substitute goods
Can replace each other in functionality. Positive XED.
Luxury goods
Highly elastic demand curve. Demand increases more than the proportional rise in income.
