“Any source through which human wants can be satisfied or can be fulfilled is known as good.” These sources can also be the services such as doctor treats his patient, teacher teaches his student.
Goods are generally classified as under:
Those goods which are tangible or have weight and volume are called material goods. Material goods are further divided into two major categories:
Non-economic or free goods:
Those which are available to satisfy human wants without any physical or mental struggle are known as free goods. For example: oxygen, rain, mothers love etc.
Those goods which can only be attained by doing a struggle are called economic goods. We must have to participate in some sort of economic activity to get these goods.
Economic activity is such type of activity in which money is involved as a reward of any mental or physical work.
Non material goods:
Non material goods are also known as services. Neither they are tangible nor do they have any weight and volume. Lawyer pleads his case, doctor examines his patient are the few examples of non-material goods or services.
These goods have no ability to satisfy human wants directly. These goods are generally used to produce further more goods. Demand for these goods are called Derived demands. For example: to build a house we need bricks, cement and a lot of other tools but they cannot satisfy human want of house directly so these goods are called capital goods. Capital goods are further classified as following:
Raw material: Sugar cane, leather, raw cotton etc.
Intermediate goods:Thread, wool etc.
Finished goods: Tools, Cars, machines, tube wells etc.
These types of goods are able to fulfil human wants directly they are not used to produce further more goods. For example: water has ability to quench thirst etc. these goods can be both material and non-material goods. Consumption goods are classified into two major categories:
Public goods are those goods on which there e is no restriction for any person to fulfil its wants while other people are using it. For example: public parks, roads etc.
Any good which belongs to a specific person is called private good. For example: Ali’s house belongs to him no one else can satisfy his want of a house with his house.