“Goods, Services and Utility “

 > Explanatory Article by Marios Kyriakou, MSc Economics


About the author: Marios Kyriakou has a bachelor’s degree in Economics from the University of Cyprus and a master’s degree in Economics from the University of Warwick. He is also a holder of CySEC’s Advanced Certificate in Financial Services Legal Framework and a professional in Online Trading, Forex and CFDs with more than 7 years of experience.

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<Last updated 13.04.2020>

Dear reader,

Hi! If you are interested in Economics, I’ve prepared the below to help you with the terminology. You should take a look at this short article where I which I discuss how we the consumers satisfy needs and wants and how economists measure satisfaction.

In the economy there are two categories of the means that people utilize in order for them to satisfy their needs. Goods and Services.

Goods are either intangible or tangible things that have some use for us and can be found in nature or can be produced by human beings. They are produced, bought or sold and then finally consumed for satisfying needs.

Some goods are free. They require no effort or money required to obtain them, for example the air we breathe, the sun rays that light our day. Economic goods on the other hand are the ones that are not free, they are produced and exist in limited quantities, so we can describe us scarce. They have a price and in order to produce them and finally consume them we have to engage in economic activities. They are the result of human effort, time and money.

When the consumer uses good, or when a service is provided to him, or her, the consumer feels satisfaction. In economics that satisfaction is called Utility. Goods that satisfy people’s needs are providing satisfaction but that does not mean that they are providing benefit for the well-being of a human being, for example cigarette or alcohol consumption: People satisfy the need but they are harming their own health.

While the consumer is consuming an additional unit of the good gains additional satisfaction, so additional utility. Additional but less utility gained each time a new unit is consumed. That additional utility is called Marginal Utility.

While the need is slowly satisfied, level by level, each time is satisfied even more reaching at some point when you feel full satisfaction.


 

“I hope I am clear on this one. If not, contact us on social media and we will do our best to help you.

Thank you for reading my articles and watching my videos.”

Marios Kyriakou

References:
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Βλαδιμήρου-Παναγιώτου Β. και Κουζαλή-Σωτηρίου Ε., Οικονομικά Γ’ Λυκείου, Κύπρος, Α΄ Έκδοση 2017.  Υπηρεσία Ανάπτυξης Προγραμμάτων, Κύπρος.
Besanko, David Braeutigam, Ronald R. Gibbs, Michael, 2011, Microeconomics, Hoboken: John Wiley, 4th ed,
International student version
Frank, Robert H., 2010, Microeconomics and Behavior, New York: McGraw-Hill Irwin, 8th ed.
Estrin, Saul Laidler, David E. W. Dietrich, Michael ., 2008, Microeconomics, Harlow: FT/ Prentice Hall, 5th ed.

Disclaimer: This article is intended for educational purposes only and does not replace independent professional judgement. Its purpose is to act as a complementary educational service to society, promoting personal development and social, economic and cultural progress of citizens. While this content has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by the creator to the accuracy or completeness of the information presented or any other written or oral information made available to any interested party and any such liability is expressly disclaimed.

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