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Types of Economic Goods Explained

This document defines and provides examples of different types of goods in economics. Public goods are non-rival and non-excludable, like street lights and national defense. Private goods are rival and excludable. Merit goods may have underestimated benefits and positive externalities, such as education. Demerit goods could have underestimated costs and negative externalities like smoking. Free goods are needed by society without opportunity cost, such as air.

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360 views2 pages

Types of Economic Goods Explained

This document defines and provides examples of different types of goods in economics. Public goods are non-rival and non-excludable, like street lights and national defense. Private goods are rival and excludable. Merit goods may have underestimated benefits and positive externalities, such as education. Demerit goods could have underestimated costs and negative externalities like smoking. Free goods are needed by society without opportunity cost, such as air.

Uploaded by

rk85mishra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Types Of Goods (Economics)

Public Goods goods with characteristics of non-rivalry and


non-excludability, e.g. street lights and national defence.

Private goods goods which do have rivalry and


excludability. The opposite of a public good.

Merit Goods - Goods which people may underestimate


benefits of. Also often has positive externalities, e.g. education.

Demerit Goods - Goods where people may underestimate


costs of consuming it. Often has negative externalities, e.g.
smoking, drugs.

Free Goods Good needed by society but available with no


opportunity cost. It is a good without scarcity. For example, air
is a free good. e.g. breathing air, Water.

Non rivalry consuming good


doesnt reduce amount available to
other people
Non excludable once provided
you cant stop anyone consuming it.

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