In human life, there are various ways to meet needs, which can be goods or services. In this economy, goods and services are depending on several factors, such as production factors or how to obtain them. Economics separates commodities into three groups based on how to obtain them, namely economic goods, free goods, and illith goods. Everyone needs a variety of items to meet their needs. These three products each have a characteristic that makes you always look for them.
However, because there are a finite number of commodities, you cannot always use an unlimited amount of goods. To help you understand it better, we’ll discuss economic goods, examples, and their differences with free stuff in the following article.
Also read: Economic Activity | Definition, Type, Actors, Characteristics, Goals
Table of Contents
What are Economic Goods?
In economics, the notion of economic goods refers to a limited set of human needs. Here, limited means that there are fewer of what society needs. Due to the scarcity of resources, humanity needs to sacrifice to obtain the goods.
The sacrifices made to achieve economic benefits are an obligation to spend money. There are also sacrifices in terms of energy, time, and thought. The provision of goods can take the form of goods that humans produce or goods offered for free by nature.
You can find many of these items in markets, convenience stores, and other types of retailers. However, business people who want to strengthen their company’s market position can use positioning strategies because this strategy is very important to improving the market position.
Examples of Economic Goods
Many items can be categorized as economic goods. These items can be accessed by the entire community easily. Here are some examples of the items in question:
Food and beverages
Food and drink can also be included in economic goods. The reason behind this is that humans have to exert some effort to get food or drink. Humans, for example, have to buy and spend money to get food or drink. Humans must also cultivate and seek food or drink, which is a form of sacrifice.
Health services
As the example above shows, not all economic goods are physical. There are also services, such as doctors. As you can observe, the number of doctors is very limited, so anyone visiting a doctor’s practice should queue first. There are many sacrifices involved in being a doctor.
The cost of treatment or using the services of a doctor covers many factors, such as the experience of the doctor and the time it takes to get a doctor’s degree. Of course, in addition to doctors, there are several examples of services that fall into the category of economic goods. Because each will use a service, someone must pay a certain fee.
Clothing
Why are new clothes an example of an economic good? Clothing is one example of goods that are classified as goods that people need. In addition, the way to get new clothes is to buy them in the store, so you should not take it for granted. Our willingness to buy it is a sacrifice, whether in terms of money, time, energy, or materials. Because the materials needed to produce clothes are limited, clothing is classified as an economical item.
Also read: COGS (Cost of Goods Sold) – A Component in Business You Have to Know
Home or residence
A house is an example of an economic item because, to buy a house, we first have to buy or build something, which costs money. In addition, the number of habitable dwellings is very limited. This can be seen in humans who have to spend money to find a place to live. This residence can be a permanent residence or a temporary boarding house.
One has to spend money on preparing materials such as wood, cement, sand, and others to build a permanent home. There is also the cost of paying energy or wages for the artisans. The emergence of the costs required to build or rent a house is what causes the residence to be classified as an economic item.
The Difference Between Economic Goods with Free Goods
Economics categorizes goods into different types based on their factors. One of the differences between goods and commodities, according to economics, is that economic commodities and commodities are free based on the completeness of their commodities. Both types of commodities are goods needed to meet human needs. These two commodities do not always appear in the form of commodities, some appear in the form of services. The differences between the two commodities are as follows:
Quantity of goods
The first difference can be seen in the number of goods. Economic goods are limited in quantity. Free goods, on the other hand, have an unlimited supply. Commodity scarcity refers to a limited number of commodities. With this, it can be concluded that the number of economic commodities that exist is still small.
The small amount is still relative and requires comparison. This comparison is based on the high level of human demand for these items. Human needs are unlimited. As a result, if the product can still meet all human needs, it will be classified as a free item.
Production
Free goods are goods that can be produced without the use of other economic resources. Air and sunlight are two easy examples that you can come across. In this world, there was an infinite number of these two objects. Humans can also directly use air and sunlight without producing it first. Unlike commodities that are classified as economic commodities. This item took some effort to make. It was necessary to make this item, which made it impossible to produce in unlimited quantities. Certain restrictions in its production cause restrictions on the number of goods available.
How to get
The third difference between the two products is how to get them. Free products don’t require effort to get them. On the other hand, to obtain economic goods, one must compete and sacrifice. Free goods do not require effort to obtain because of their unlimited quantity. However, economical goods have a limited amount.
The third difference between the two products is how to obtain them. Free products don’t require any effort to get them. On the contrary, to get economic goods, one must compete and sacrifice. Due to their unlimited supply, freebies do not require any effort to obtain. On the other hand, economic goods are limited in number.
Conclusion
That is the complete discussion of economic goods and free goods in the economic field. Economics is a science that requires a broad discussion of the value of an item that we commonly use in everyday life. We don’t always realize that the goods we use every day are classified as economic goods or free goods.
Also read: The Importance of Consolidated Financial Statements for Your Company!
Concerning the above discussion, you are one of the traders who use economic commodities as a tool in your business (such as selling clothes, food, beverages, and else). Are you a business owner who has difficulty managing the company’s financial or bookkeeping processes? Of course, financial statements are very important for you as an entrepreneur. Accounting Software from HashMicro can assist you in making financial statements. Even if you do not have an accounting background, you can do bookkeeping with complete and easy-to-understand system functions and integrate with the bank.
