Economics: Consumer Goods
Trisha N, Oseremen E, Fardad KH
New York City, home to many goods ready for your consumption. But what are consumer goods exactly? ...
Consumer Goods Defined
Consumer Goods are tangible goods that are ready for consumption in satisfaction of human wants, which are clothing or food, and are not utilized in any further production. Consumer goods must be ready to be used, for example copper is not a consumer good because consumer goods have to be transformed into usable goods. Consumer goods benefits the society by satisfying daily needs, and usually come from capital goods. There are three types of consumer goods: durable goods, non-durable goods, and services.
Explanation the Three Types of Consumer Goods
Durable Goods: are goods not for immediate consumption and able to be kept for a period of time. These goods are the things that we don't always need, but what we want. Durable goods lasts longer than three years, but from time to time durable good may need maintenance. An example would be washing machines may last more than three years but over time people need to call the handyman because it does not work as good as it used to when it was new.
Non-durable Goods: are goods that are immediately used by the customers and has a lifespan for at most 3 years or less. These goods are usually daily necessities such as food, clothes, and bathroom products. Other examples of non-durable goods include food and clothing. Opposite of durable goods. Also called soft goods.
Services: are the actions of helping or doing work for someone, which are intangible products such as cleaning, medical treatment, and banking. Services is closely associated with goods. Services help tangible and non-tangible good be created and sold, which helps the society in a positive way.
Local Marketplace Examples
For example, the market of a local movie theater or restaurant includes not just the people who regularly go there but everybody who lives within driving distance. The market for a landscaping business includes all the homes and commercial properties within a logical reach. The market for downloadable e-books over the internet includes everyone connected to the web. The market for personal computers includes homes, schools, businesses, and government organizations.
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Impact The Economy By Consumer Goods
A GDP component as it is, consumption has an immediate impact on it. An increase of consumption raises GDP by the same amount, other things equal. Moreover, since current income (GDP) is an important determinant of consumption, the increase of income will be followed by a further rise in consumption: a positive feedback loop has been triggered between consumption and income.
An autonomous increase of consumption, if at the same level of income, would reduce savings, but the positive loop just described (known as the "Keynesian multiplier") will imply an increase of income level with a positive impact on future savings.
If directed to goods and services produced abroad, an increase of consumption will immediately push up imports, while a similar indirect effect will result from consuming domestic products requiring foreign raw materials, energy, semi-manufactured goods.
Importance of Consumer Goods
Consumer Goods provide daily needs, such as what we eat and what we wear, these goods allow people to have the necessary elements needed to go on through the day. It boosts our economy as well, so without these goods, we wouldn't have been able to survive in more ways than one. It improves our trade industry and many of our other economic industries as well.
Development of Consumer Goods
OSE Like most goods, Consumer Goods are made by the use of raw materials. Foods such as apples and carrots are already created but are used to make other foods like pies and soup. Clothing is made through the use of raw materials in a factory. Video games are developed through the programs and animators working. Almost every work cluster is involved with Consumer goods, making it an extremely necessary thing to have. Without it, most jobs would be out of it.