Basic Economics: Goods and Services

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Part 2: Money Or No Money

Now, a service can also contain a good. Someone who fixes you dinner gives you food, which was bought. In this example, the food is the good and the person's fixing it for you is the service.

In the same way, your teacher gives you a service by teaching you social studies. He or she also gives you a good by giving you a textbook.

Your teacher teaching you social studies is a good example of a service that you personally don't pay for. (Your family might pay for it, but you don't.)

And not all services are economic, either. A service can be as simple as reading a book to someone. This kind of activity doesn't cost anything, but it is something that one person did for another.

A good doesn't have to cost anything, either. If you give your friend a book or a CD, then you given that friend a good, since we have already defined books and CDs as goods. Your friend didn't give you any money for the good. But you didn't really do something for your friend, either; you just gave your friend something he or she could hold or touch.

Remember, the one thing that sets goods and services apart is the ability to touch them. You can touch a good, but you can't touch a service. You can touch the result of a service but not the service itself.

First page > Which Is Which? > Page 1, 2

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