Capital goods

Capital goods are fixed assets which are used in the productive process in order to produce a finished ‘consumer’ good. Capital goods are not bought for their own utility; they are bought in order to be used in the productive process. Examples of Capital Goods Factories Offices Machines Printing press Combine harvester Assembly line In …

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Private, Public and Free Goods defined

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Definition and explanation of different types of goods Free good – no opportunity cost Private – Good with opportunity cost, rivalry and excludable Public good – non-rivalry, non-excludable Free Good A free good is a good needed by society but available with no opportunity cost. It is a good without scarcity. For example, air is …

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Veblen Goods

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Definition of a Veblen Good. A Veblen good is a good where demand rises as price rises because people feel its higher price reflects greater status. Readers Question: I once ran across a term and now can’t find it. It’s the economic theory that consumers will purchase a product or service which cost more money …

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Inflation and the Basket of Goods

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The basket of goods reflects the most commonly bought goods in an economy. When calculating inflation, statisticians check these 1,000 most commonly bought goods and multiplier price changes by their respective weighting. There is an interesting interactive graph here at the NYT showing the different components of the US basket of goods, used to calculate …

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Question: Why set price of goods close to the market price?

Readers Question: I would like to know why it isn’t advisable to price your goods or product with the market price. It depends on the market, product and state of economy. In a competitive market, you may have to sell your good at the market price. If you sold at a higher price, you wouldn’t …

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Tesco Value Goods – Why are they Unattractive?

Why do Firms Make some Goods Unattractive/difficult to buy? It may seem strange but sometimes firms purposefully want to make a good unattractive. Why is this? Tesco value products have an unattractive design. It shouts out “I’m cheap and low quality”. What happens is that customers with inelastic demand, – people who give importance to …

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Police and Fire Services as Public Goods

Q. Use economics and political theory to explain why the fire and rescue service should be provided by the state. I don’t want the answer….I just don’t understand what this means. This revolves around a fundamental debate in economics – How much should the government intervene in the economy? Ideally, goods and services would be …

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What is Britain Good at – Growth areas in the Economy

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Winter in Britain can be pretty bleak and grey; no wonder many want to leave. But British ingenuity has designed this all-year round strawberry growing facility. Artificial light powered by renewable energy and this impressive mechanism ensures the plants get optimal access to light. No more expensive imports, no need for pesticides or even backbreaking …

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