Difference between Free And Economic goods

Physical objects are called goods that one or more people can give value to, and this very comprehensive definition invites us to make a large group of differentiation within the category, according to multiple classifications that may exist between different goods:

  • according to tangibility,
  • according to the relationship between your demand and that of other goods,
  • according to the possibility of moving them,
  • according to the function in the market (some goods are for consumption and others for investment),
  • according to the property and usufruct regime,
  • according to availability : this last category of analysis divides the goods between free goods and economic goods .

What then are free and economic goods?

Free goods

The seen definition of goods refers to the capacity to satisfy human needs. In the capitalist world, it is common to think that everything that is capable of satisfying a need for people can appropriate, and then buy and sell. However, there are some goods that, due to their abundance in nature, cannot have an owner, nor a process of appropriation or transformation, and therefore do not have a price: these goods are called free goods .

Although when a person thinks about goods, it is difficult to imagine free goods soon, they perfectly fit the fundamental condition that is that of satisfying needs, even for cases of biological needs on which people’s lives depend.

It is important to keep in mind that free goods do not have a productive transformation, but it may happen that some companies make a transformation of it and there they do acquire a sale price: in economics, the original and the transformed goods are two different , the first free and the second economic.

Examples of free goods

The following list shows some examples of free goods , with a clarification: since the free condition depends on the abundance in nature, it should not be ruled out that at some point a good loses its free condition.

  1. Water
  2. Sunlight
  3. The sand
  4. The sound of a waterfall
  5. The rain, in times of drought
  6. The stones
  7. The image of a sunset
  8. The current of a river
  9. Fresh air
  10. Wind

Enconimics goods

What is the difference between a free good and an economic good? Let’s see. The opposition produced between free and economic goods occurs according to the abundance in nature. Economic goods are those that fulfill the fundamental characteristic of scarcity , which is why economic goods are often also called scarce goods.

The fundamental condition for a good to be considered a scarce good is that of having a need greater than availability , according to the axioms of the microeconomic consumer theory: the axiom of non-satiety affirms that the need is always infinite. As there is less than what is needed, these goods are acquired in the market paying a price for their use.

All the classifications that are made between the goods, in short, are made with respect to the economic ones that are of interest to the discipline of the economy.

Examples of economic goods

The following list includes ten examples of economic goods , trying to cover the different groups that belong to that category:

  1. Bottled mineral water
  2. Petroleum
  3. A taxi
  4. Detergent
  5. A box to store shoes
  6. A stock title on the stock exchange
  7. A machine for cutting iron
  8. Cell phone
  9. An airline flight
  10. The education service

 

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