Fundamental Concepts and Terminologies

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Use-value is determined by the usefulness of a commodity to a consumer for their various needs (e.g., food, water have high use-value). Exchange-value is the worth of one unit of a commodity measured …

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Price is the exchange value (worth) of a commodity measured in terms of units of currency. If a commodity is exchanged for money, then such monetary exchange value is termed as 'price'. It represents …

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Goods are commodities which have physical existence and are meant to satisfy consumption needs (e.g., food, mobile phone, television). Services are commodities which are intangible or do not have phys…

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Non-economic goods are goods which do not command exchange value. They are abundant in supply and do not go through the economic process of production and distribution, though they are consumed by peo…

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Private goods possess excludability and competitiveness - once owned by one individual, another cannot use it simultaneously, and individuals compete for ownership (e.g., packet of biscuits, mobile ph…

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Durable goods can be used for a long period of time and repeatedly (e.g., shoes, clothes, television, refrigerator). Perishable goods cannot last for a long time and are consumable only once (e.g., mi…

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Consumer goods satisfy human wants directly and have passed the final stage of production (e.g., cooked food, ready-to-wear clothes). Producer goods are used at intermediate stages of production to pr…

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According to Alfred Marshall, wealth is something which is useful, scarce, capable of getting exchanged, and can be owned by somebody. It must satisfy human wants, be scarce in supply relative to dema…