A consumer good is any item that can be purchased by consumers. These goods are often categorized as either short-lived, like food, or long-lived, which are also known as consumer durables. Clothing is another common example of a consumer good.

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In economics, a 'good' is a broad term for anything that an individual values and would like to have more of. This definition is not limited to physical products sold in a market but also includes non-market items and concepts, such as 'free time' or 'clean air'.

Economic Good

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

CORE Econ - The Economy 2.0: Microeconomics

This example centers on Karim, a recent Business Studies graduate who has moved to Madrid and can expect to earn a wage of €30 per hour. He confronts a classic trade-off between work and leisure. On one hand, he desires a higher income to cover living expenses and afford a better apartment, which requires working more hours. On the other hand, he wants sufficient free time to socialize and explore the city, which necessitates working fewer hours. The core of his decision is to determine the optimal number of work hours that will best balance his competing desires for income and free time.

Karim's Work-Leisure Choice (Figure 3.3)

Consumer Good

In economics, 'bads' refer to things that people do not want and might be willing to pay to avoid, such as household refuse or unpleasant-smelling drains. They are the opposite of economic goods.

Economic 'Bads'

A private good is defined by two key characteristics: it is both rival and excludable. Rivalry implies that one person's consumption of a good prevents another person from consuming that same unit. Excludability means that access to the good can be restricted, typically to those who have paid for it.

Private Good

A common framework for categorizing economic goods is a two-by-two matrix that classifies them according to two key attributes: whether they are rival and whether they are excludable.

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