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Good (economics)

Good (economics) Definition

A good in economics is any physical object (natural or man-made) or service that, upon consumption, increases utility, and therefore can be sold at a price in a market. If an object or service is sold for a positive price, then it is most likely a good since the purchaser considers the utility of the object or service more valuable than the money. Objects and services that are not traded on markets (such as Air or Thunder) are more difficult to determine if they are a good or not.


This contrasts with a bad that decreases utility. Another way to think of it is that a good is something that you want more of, and a bad is something that you want less of. For example, leisure is a good, but work is a bad from the standpoint of the worker, though the money that is paid for work is a good. A good is often thought of as only a physical product, such as in the accounting definition as an "accounting good". In economics, a good does not need to be a physical object. For example, a service such as getting a haircut would be a good as long as the recipient wanted it. The broader definition economists use is valuable in thinking of many of the decisions people make among a number of available choices.








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