CHAPTER THREE GRADE 10

What are Categories of Goods? Cbc Notes in Kenya

Goods in economics are classified by their characteristics, usage, and income elasticity. Major types include private goods (excludable/rival, e.g., food), public goods (non-excludable/non-rival, e.g., national defense), consumer goods (final use), and capital goods (used for production). Other types include normal, inferior, substitute, and complementary goods.

Goods can be categorized as follows

• Free goods and economic goods
  • Free goods are gifts of nature g. sunshine, rain, oceans
  • They have utility but no monetary value
  • Economic goods are scarce in supply and have money value g. TV, books, minerals etc
• Producer and consumer goods
  • Producer goods are used in producing They are also known as capital goods e.g. machines, equipments and tools.
  • Consumer goods are readily usable by the final E.g. food, clothing, furniture, cosmetics, medicine etc
• Perishable and durable goods
  • Perishable goods go bad easily unless stored using very special facilities g. meat, milk, vegetables, tomatoes.
  • Durable goods continue giving services for a long time and can be spoiled by agents such as wear and tear g radio, furniture, buildings,
• Public and private goods
  • Public goods belong to no one in particular but are owned by the government or by all of us collectively g. roads, airports, rivers, public hospitals, public parks, railways, churches etc.
  • Private goods are owned by private individuals in their private capacities either singly or as a group g. personal cars, private schools etc.

• Intermediate goods and finished goods
  • Intermediate goods are used as inputs/raw materials to be processed into a more useful E.g sisal, sugarcane, wood, cotton etc.
  • Finished goods are final products that come out of processing in the required form (output) g flour from maize or wheat, dress from cotton.
• Material goods and non material goods
• Material goods are commodities that are tangible g food, books, chairs, vehicles, shoes
• Non-material goods are intangible g. teaching, nursing etc