CHAPTER THREE GRADE 10
Difference Between Goods and Services? CBC Notes in Kenya
Goods are tangible, physical items that can be stored, owned, and transferred (e.g., cars, food), whereas services are intangible actions, efforts, or performances that are consumed simultaneously with their production and cannot be owned (e.g., haircuts, consulting). Key differences include tangibility, ownership, storage, and perishability
Goods and services
- Goods are tangible visible objects that can be used to satisfy human wants
- Services are intangible efforts or acts that can satisfy human Services cannot be seen i.e. not visible
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
Differences between goods and services
| Goods | Service |
| · Are tangible ie can be seen, touched or felt | · Are intangible i.e. cannot be seen touched |
| · Not always exhausted during use | · Always used up or exhausted after every act |
| · Identical goods can be created through mass production | · Are difficult to make identical since they vary over tome and provider |
| · The price paid is for the possession or ownership of the good | · Price paid is the effect of the act or the effort |
| · Surplus goods can be stored for latter use | · Cannot be provided in excess and once provided cant be stored later |
| · Are easily separable from the producers | · Are inseparable cant be |
Economic resources
- These are inputs needed in the production process in order to produce what is required to satisfy human
- They are the means by which production and provision of goods and services is made
Types of economic resources
Natural resources – Are gifts of nature e.g. land, natural forests, rivers, oceans and minerals
Artificial resources – Are man made resources e.g. machinery, tools, tarmac roads, dams, railways lines etc
Human resources – Refers to mental and or physical efforts rendered by people to organizations or to other human beings in producing goods and providing services e.g. nurses, teachers, painters, drivers.
Economic resources can be divided into
- Renewable resources
- Non-renewable resources
Renewable resources are those whose supply can be restored and if not, creating goods and services is reduced and it may stop altogether
Non-renewable resources are those whose supply cannot be stored after use. Using these resources leads to their exhaustion sooner or latter
Example of renewable and non renewable resources
| Renewable resources | Non-renewable resources |
| Wood | Coal |
| Natural rubber | Building stones |
| Wool | Gravel |
| Silk | Iron |
| Leather | Aluminium |
| Solar energy | Gold |
| Hydro-electric power | Lead |
| Wind power | Natural gas |
| Soda ash | |
| Vehicle |
Characteristics of economic resources
- They are scarce
- They have monetary value
- They are unevenly distributed
- They can be used to create goods and service
- They can be combined together in different proportions to create goods and services
- They can be transformed from one party to another
Scarcity, choice and opportunity cost
- Scarcity is used to describe the limited nature of economic resources
- Choice id the act of deciding what wants to satisfy first with the scarce or in adequate resources Choice is made with a list of scale of preference which is a list of unsatisfied wants arranged in order of priority
- Opportunity cost is the value of the best foregone The real cost of satisfying any want is the alternative that has to be foregone in order to do so
Recent Comments