5. What is the difference between goods and services?

There are obvious differences between goods and services that are analyzed based on characteristics of each. A good is a tangible object used either once or repeatedly. A service is intangible. The tangibility differentiator indicates the ability to touch, smell, taste and see which is absent in services. On the quality front, with goods it is homogeneous, once produced the quality is uniform across all line of products. With regard to service it is inseparable from the service provider and heterogeneous, where each time the service is offered it may vary in quality, output, and delivery. It cannot be controlled. Another key distinction is perishability of services and the non perishability of goods. Goods will have a long storage life and are mostly non perishable. Services are delivered at that moment and cannot be stored for repeat use. Several times goods and services are linked closely and cannot be detached.

6. What kinds of goods do you know?

There are two main kinds of goods: consumer goods and manufactured goods. Consumer goods are alternately called final goods, and the second term makes more sense in understanding the concept. Essentially, consumer goods are things purchased by average customers, and will be consumed or used right away. This is in contrast to other types of goods called intermediate goods. Intermediate goods are products produced or things sold that will be used in the making of something else by another manufacturer. The issue of consumer goods is most important in assessment of Gross Domestic Product. Economic analysts can test the different types of goods that are included in the GDP, and look at how each area is performing. Manufactured goods are goods that have been processed by way of machinery. As such, they are the opposite of rawmaterials, but include intermediate goods as well as final goods.

7. What are capital goods?

Capital is used to create goods or servicesthat are not themselves significantly consumed in the production process.Capital goodsmay be acquired withmoneyorfinancial capital.

Capital goods include factories, machinery, tools, equipment, and various buildings which are used to produce other products for consumption. Capital goods are products which are not produced for immediate consumption. These types of goods are important economic factors because they are key factors to developing a positive return from manufacturing other products and commodities.

Manufacturing companies also use capital goods. Capital goods help their company make functional goods to sell individuals valuable services. As a result, capital goods are sometimes referred to as producers’ goods or means of production. An important distinction should also be made between capital goods and consumer goods, which are products directly purchased by consumers for personal or household use.

8. What does the term “value” mean in economics?

The economic value of a good or service has puzzled economists since the beginning of the science. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods which can be exchanged. From this analysis came the concepts value in useandvalue in exchange. Value is linked topricethrough the mechanism ofexchange. When an economist observes an exchange, two important value functions are revealed: those of the buyer and seller.

Value is how much a desired object or condition is worth relative to other objects or conditions. Economic values are expressed as "how much" of one desirable condition or commodity will, or would be given up in exchange for some other desired condition or commodity. Value theories are a large part of the differences and disagreements between the various schools of economic theory.