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Economic Goods
From ZuluNotes - Free Leaving Cert Notes
| Economic Goods | ||
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| Subject: | Economics | |
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| Section | ||
| Question | ||
| Level | H&O | |
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In Economics, the consumer purchases economic goods. An economic good has three main characteristics.
Characteristics
- It provides utility
- It is scarce in relation to demand - therefore it commands a price. E.g. Air is not an economic good.
- It is transferable. E.g. Good health or natural abilities are not an economic good
Paradox of value
The paradox of value refers to the seemingly paradoxical prices commanded (or not commanded) by certain economic goods. This is due to the relative scarcity of the good.
- High value in use and low value in exchange - e.g. water
- Low value in use and high value in exchange - e.g. diamonds.
