Question 24 of 27
Q.Examine the differences between Free goods and Economic goods.
Yanam BieapBIEAP AP Intermediate (1st Year) Commerce Board 2024Subjective· 5mImportance★★★★★est
89% · 24/27 Questions
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Start your 14-day free trial to unlock the full solution →Free goods exist in abundance, carry no price and are gifts of nature; economic goods are scarce, carry a price, have exchange value and ownership. Economics is concerned mainly with economic goods because they are scarce.
Meaning
A good is anything that satisfies a human want. On the basis of their supply relative to demand, goods are classified into free goods and economic goods.
Distinction
| Basis | Free Goods | Economic Goods |
|---|---|---|
| Supply | Available in unlimited quantity, more than the want for them | Scarce; supply is limited relative to want |
| Price | Have no price | Command a price |
| Source | Gifts of nature | Generally the result of human effort |
| Ownership | No ownership; nobody can claim them | Privately owned; can be bought and sold |
| Exchange value | Have no exchange value | Have exchange value |
| Examples | Air, sunshine, water in a river | Food, cloth, books, furniture |
| Place in economics | Outside the study of economics | Central subject matter of economics |
Important point
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