What are the different Classification/ Types of goods? |
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| Ans : The different types of goods are explained below:
i) Normal goods:- These are those goods whose demand increases as income increases and demand decreases as income decreases. For example, wheat, rice, shirt, gince, etc. are the goods which quantity demand increases when there is rise in income.
ii) Inferior goods (low quality):- Inferior goods are those goods whose demand decreases when income of a consumer increases. On the other hand, demand for inferior goods increases as the income of the consumer decreases. For example, demand for cheap quality goods decreases as there is increase in income.
iii) Substitute goods:- Substitute goods are those goods which can be used in place of each other. In the absence of one another can be used. These goods are also known as competitive goods. For example, Tea and coffee, coke and Pepsi etc. In case of these goods, a rise in price of one goods leads to rise in demand of other goods.
iv) Complementary goods:- Those goods which are used jointly to satisfy human wants is known as complementary goods. These goods are either purchased together or used together. For example, pen and ink, lighter and stove, bike and petrol. In case of these goods, if price of one goods increases then the demand for other goods decreases.
v) Giffen goods:-Giffen goods are special type of inferior goods whose demand increase with rise in price and demand decreases with fall in price. It means that there is positive relationship between price and quantity demand in case of giffen goods.
The giffen goods are mostly consumed by poor household. For example, maize can be taken as an example of giffen goods. It is consumed by poor household of remote areas of Nepal. If it’s price increases, it’s demand will increase because income of the consumer will insufficient to purchase other superior goods.
Maize =Rs.10 x 50kg =500
Rice =Rs.25 x 10kg =250
Rs.=750
When the demand of giffen goods increases
Maize =Rs.12 x 50kg =600
Rice =Rs.25 x 6kg =150
Rs.=750
vi) Public goods:- Public goods are those goods which are common to all and are used by society collectively. Public goods are those goods which have characteristics of non- excludability and non-rivalry. Non excludability means non- payer’s consumers cannot be prevented from using it. Non rivalry means that consumption of goods by one person does not reduce the amount available for others. For example, park, bridge, road, etc.
vii) Private goods:- private goods are those goods which are owned by private individuals. Private goods can be defined as the goods which have characteristics of excludability and rivalry. For example land, building.
viii) Economic goods:- Economic goods are those goods which are scarce and can be obtained only on payment. These goods are limited in quantity and most of them are man-made things. For example, cycle, motor cycle, car, house, food, clothes, computer, etc. are economic goods. Thus, there would not be economics if all goods were free.
ix) Free goods:- Free goods are those goods which exist in unlimited quantity and people can have as much as they like without any payment. In other words, free goods are free gift of nature which people get free of cost. For example, air, sunlight, etc.
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