Goods and services Notes, Quizzes & Revision
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Goods are things that we can touch.
Services refer to the activities that people or organisation do or provide to get paid to satisfy the needs or wants of a consumer.
Types of goods
- Producer and consumer goods
Producer goods are used in producing other goods. They are also known as capital goods e.g. machines, equipment and tools.
Consumer goods are readily usable by the final consumer. E.g. food, clothing, furniture, cosmetics, medicine etc.
- Economic goods and non economic goods
Economic goods are goods with a price and are generally limited in supply.
Non economic goods are free goods with no price. These are also known as free goods.
- Intermediate goods and finished goods
Intermediate goods cannot be used until they are further processed
Example: cotton
Finished goods have already been transformed into final products for consumption
Example: clothes
Types of services
- Commercial services
Business use these services in conducting various business activities
They include banking services, insurance
- Social services
These are essential public services. They are provide by the government or other organisations such as non profit organisations
Include services in education, sanitation, medical facilities
- Personal services/direct services
These are services provide by an individual according to their personal needs
They include teaching, healthcare
Importance of goods and services
- Goods and services help satisfy consumer needs and wants
- Business make money by producing and selling goods and services
- Goods and services ensure the community of business
- Selling goods and services is a source of income
Distinguishing between goods and services
| Goods | Service |
| can be seen, touched or felt | cannot be seen touched |
| Not always exhausted during use | Always used up or exhausted after every act |
| Identical goods can be created through mass production | Are difficult to make identical since they vary over tome and provider |
| The price paid is for the possession or ownership of the good | Price paid is the effect of the act or the effort |
| Surplus goods can be stored for latter use | Cannot be provided in excess and once provided cant be stored later |
| Easily separable from the producers | Inseparable cant be |
Characteristics of goods
The characteristics of goods and services can be used to distinguish or differentiate goods and services
- Tangible that is they can be touches and felt.
- Separated from the seller.
- Ownership of goods can be transferred from the seller to the buyer.
- Can be stored for future use
- Can be quantified in various shapes and sizes
- The quality can be standardised
- Can be seen
Characteristics of services
- Intangible that is they cannot be touched or felt
- Inseparable from the service provider
- Cannot be transferred to the client
- Cannot be stored for future use
- Cannot be quantified
- Cannot be seen
- The quality cannot be standardised
Sources and places for buying goods and services
- Goods can be obtained from various sources and places. such as open air markets, kiosks, supermarkets online markets
- Services are acquired from different service providers such as barbershops, transport operators, lawyers offices, they can be located at different places
- Goods and services can be obtained through online markets platforms through websites and applications
- Examples of online services include Online banking, where people can conduct banking transactions such online cash withdrawals and payments.