Economic goods are typically thought of as tangible items that meet an economic want. An economic want is something that can be satisfied by barter or financial exchange. Such items must be in limited supply, useful and transferable. Intangible items, such as actions and services, can also be considered economic goods if they are performed for hire.
Those things that are freely available, such as sunshine and gravity, are not economic goods. These types of items are often termed free goods. Though these items might have great utility, their abundance makes an economic exchange to secure them unnecessary. The limited supply of an item helps to establish the cost that must be paid to secure its possession.
The utility of an item is its capability of satisfying an economic want. This may be a technical specification or a subjective judgment. How well an item satisfies the want and the availability of that item determines its economic value. The perfect item may be scarce, while there remain a range of less acceptable items in greater supply. In this situation, the optimum item would be dear and the less useful items more affordable.
An item might be scarce or in limited supply and also the perfect thing to satisfy a desire. If the item is not transferable by means of an exchange, then it is not an economic good. It could not come into possession of the individual with the economic want. If an item exists but is not for sale, it is not transferable and thus not an economic good. The same would be true if it were not physically possible to carry out the transaction.
Consumer economic goods are those that are bought and taken into possession by the end user. These may be tangible items or intangible services. A washing machine is a tangible item, the services of a washing machine repairman is an intangible. The economic value of a good is determined by its supply and utility in satisfying an economic want. This want can be a highly subjective thing, depending on individual perception and taste.
Commercial economic goods are often items purchased by a retailer for direct resale to consumers. They may also include the machinery, raw materials, and services necessary to manufacture consumer goods. The values of these items are determined more empirically by technical requirement and physical availability. Conversely, the values of consumer economic goods are subject to manipulation by suppliers. Economic want can be influenced by advertising and availability by production quota.
