Terminological Words of Economics

In economics, some basic words are used. The meaning of these words differs between everyday language and the language of economics. Therefore, it seems necessary to be familiar with the meaning of such words.

Thus, the definitions of some important words used in economics are presented below:

(a) Goods and Services: 

In ordinary spoken language, tangible materials that can be touched and seen, such as tables, chairs, copies, cupboards, beds, etc., are called goods. However, in economics, both tangible substances that can be touched and seen and intangible services that cannot be touched and seen, used to fulfill human needs, are included under goods. 

This includes not only solid objects but also any service that can be felt and has the quality of fulfilling human needs. The services provided by teachers, doctors, lawyers, etc., all fall under goods. 

Therefore, in economics, any tangible substance or intangible service that can fulfill human needs or has utility is called a good.

(b) Types of Goods: 

In economics, goods are of various types. Their types can be presented as follows:

1. Economic and Free Goods
   • Economic Goods: Goods that exist in limited quantities in nature and are produced based on demand and supply fall under economic goods. In such goods, supply is generally less than demand, for example, pens, lentils, rice, mobile phones, computers, televisions, etc.
   • Free Goods: Goods obtained naturally without labor and expenditure of resources are called free goods. Such goods exist in unlimited quantities in nature, for example, sunlight, flowing water in rivers, air, etc., are natural goods.
2. Material and Immaterial Goods
   • Material Goods: Goods that can be seen and touched and have size and weight are called material goods, for example, houses, sheds, wood, copies, books, etc.
   • Immaterial Goods: Goods that do not have a definite size or weight and cannot be touched or seen are called immaterial goods. For example, the teaching service of teachers and professors, the service of doctors, the voice of singers, water, air, sunlight, etc., are immaterial goods.
3. Consumer and Producer Goods
   • Consumer Goods: Goods that can be directly consumed are called consumer goods. These goods are purchased to obtain satisfaction, such as lentils, rice, pens, copies, mobile phones, watches, radios, etc., can be consumed directly.
   • Producer Goods: Goods that are used in the production process without being directly consumed are called producer goods. These goods are purchased with the aim of earning income or producing other goods. For example, tractors, sewing machines, flour for making bread, etc., are producer goods.
4. Transferable and Non-Transferable Goods
   • Transferable Goods: Any good whose ownership can be transferred from one person or group to another person or group is called a transferable good, for example, land and buildings, vehicles, machinery, etc.
   • Non-Transferable Goods: Goods whose ownership cannot be transferred from one person or group to another person or group are called non-transferable goods, for example, a doctor's expertise, a singer's singing skills and voice, a teacher's teaching skills, etc.
5. Private and Public Goods
   • Private Goods: Goods under individual ownership or rights are called private goods. Houses, motorcycles, cars, etc., are examples of this.
   • Public Goods: Goods that are not under individual rights but are under the rights of the entire society or nation are called public goods. For example, rest stops, public shelters, roads, bridges, etc.
6. Perishable and Durable Goods
   • Perishable Goods: Generally, goods that can be used only once and spoil quickly are called perishable goods, for example, vegetables, fruits, etc.
   • Durable Goods: Goods that are durable for a long time and can be used many times are called durable goods, for example, clothing, furniture, houses, machinery, etc.
7. Normal, Inferior, and Luxury Goods
   • Normal Goods: Generally, if the demand for a good increases when the consumer's income increases and decreases when the income decreases, such goods are called normal goods, for example, Basmati rice, meat, fruits, etc.
   • Inferior Goods: Generally, if the demand for a good increases when the consumer's income decreases and decreases when the income increases, such goods are called inferior goods, for example, Gundruk (fermented leafy greens), food sold in open spaces, coarse rice, etc.
   • Luxury Goods: Goods that are not necessary for sustaining life but are associated with prestige and status for people are called luxury goods, for example, diamonds, gold and silver jewelry, etc.
8. Substitute Goods, Complementary Goods, and Giffen Goods
   • Substitute Goods: If one good can be used in place of another, these goods are called substitute goods for each other, for example, tea and coffee can be taken as substitutes.
   • Complementary Goods: If the consumption of one good is impossible without the consumption of another good, such goods are called complementary goods for each other, for example, pens and ink are examples of this.
   • Giffen Goods: Low-quality goods related to the daily life of low-income consumers are called Giffen goods. There is a positive relationship between the price and demand for such goods. The concept of Giffen goods was first introduced by British economist Sir Robert Giffen.