Types of Goods and Services in Economics
Page two delves deeper into the types of goods and services in economics, providing a comprehensive overview of private goods, public goods, and the concept of free riders.
Private goods are defined as those belonging exclusively to their owner, who has purchased them and has the sole right to use them.
Example: A bar of chocolate bought for £1 is an example of a private good.
Public goods, on the other hand, cost money to produce but are accessible to everyone equally. They are typically funded through taxes paid by citizens to local government authorities.
Example: Street lighting is a classic example of a public good.
The page introduces the concept of free riders - individuals who use a good without paying for it. This leads to a situation where public goods may be underprovided or not provided at all, as people can consume the good while paying little or nothing towards its cost.
Vocabulary: A free rider is a person who benefits from a good or service without paying for it.
The text then shifts focus to the nature of the economic problem, distinguishing between needs and wants. Needs are essential goods and services required for human survival, while wants are goods or services that are not necessary for survival but are demanded to fulfill a function.
Quote: "All individuals have a right to have these needs met & this is stated in Articles 25 & 26 of the United Nations Universal Declaration of Human Rights, drafted in December 1948."
The page concludes by reiterating the concept of scarcity and its implications for economic decision-making by consumers, businesses, and governments.
