Goods And Services
In our daily life, we come across variety of goods and services. When we are hungry, we take food. When we are thirsty, we take water. In a similar way we need many goods such as pen and paper to write, house to live in, chairs to sit, a washing machine to wash the clothes, a television to watch the programmes etc. All these are the examples of goods that satisfy our wants.
But goods alone are not sufficient to fulfill our wants. We need the services of different people for different jobs. For example we require a hairdresser to cut our hair, a doctor to cure us, a tailor to stitch our clothes etc. These are a few examples of services that satisfy our wants. Both goods and services satisfy human wants. These goods and services are as diverse as our wants.
Goods
Goods are tangible in nature i.e. they can be seen and touched.
There is a time gap between production and consumption of goods as they are produced first and consumed later.
They can be stored and utilized when required.
They can be transferred from one place to another.
Services
Services are non-tangible in nature i.e. they can neither be seen nor be touched.
There is no time gap between the production and consumption of services. That is why they are produced and consumed simultaneously.
Services cannot be stored.
Transfer of service is not possible.
Want
A want is something that you desire and something that an individual does not possess yet. Unlike a need, which is mandatory for existence such as in the case of oxygen, water, or food, wants are not mandatory for the existence.
Desire
The word desire can be defined as a strong feeling of wanting something or someone. It is similar to a craving, which is more intense in comparison to a want. Unlike in the case of a want, a desire has a stronger degree of longing and the need for fulfillment. Unlike a want that come and passes away quickly, a desire stays a longer period.
Difference between Want and Desire
A want can be defined as a simple desire for something that one does not have already.
A desire is a more intense craving that a person has for something or someone.
The main difference is that while a desire is stronger and an intense feeling, this is comparatively less in the case of a want.
Demand is an economic principle referring to a consumer's desire for a particular product or service.
Utility function describes the amount of satisfaction a consumer receives from a particular product or service.
Wealth
Wealth measures the value of all the assets of worth owned by a person, community, company, or country.
Types of Wealth
Personal Wealth – This refers to the stock of goods such as buildings, houses, lands, furniture, cash in hand, cash at bank, stocks of other commodities, company shares, clothes etc. owned by a person.
National Wealth – It comprises of the wealth of the entire nation. It also includes public properties which are enjoyed by a country’s citizens who do not have any right of ownership over the same. Some popular examples of public properties are bridges, roads, hospitals, parks, public sector projects, public educational institutions etc.
Welfare
Welfare economics is the study of how the structure of markets and the allocation of economic goods and resources determine the overall well-being of society. .
Cost and Price
Price is the amount a customer is willing to pay for a product or service. The cost of producing a product has a direct impact on both the price of the product and the profit earned from its sale. Cost has 3 main elements which are classified as Material, Labour and Expenses.
The cost types are:
1. Fixed Costs :- business costs, such as rent, that are constant whatever the amount of goods produced.
2. Variable Costs :- Variable costs are costs that change as the quantity of the good or service that a business produces changes.
3. Semi-Variable Costs :- A semi-variable cost, also known as a semi-fixed cost or a mixed cost, is a cost composed of a mixture of both fixed and variable components. Costs are fixed for a set level of production or consumption, and become variable after this production level is exceeded.
Capital
Capital is a broad term that can describe any thing that confers value or benefit to its owner, such as a factory and its machinery, intellectual property like patents, or the financial assets of a business or an individual.
Income
The flow of money or goods according to an individual or a group of individuals a firm or the economy over some period. It may originate from the sale of productive services (as wages, interest, profit and rent).
ROLE OF AGRICULTURE IN ECONOMIC DEVELOPMENT
Agriculture is a primary activity. It is defined as the cultivation of the soil in order to grow food crops (like rice, wheat, coarse cereals and pulses), commercial crops (oilseeds, cotton and sugarcane), plantation crops.
Role of agriculture for the development of an economy may be stated as:
Contribution to GDP :-
Contribution to GDP.: Agriculture has been observed to contribute a very large share of GDP of most of the economies before industrial development take place in them.
In some typical African economy, agriculture produces about 50 per cent of their GDP.
Contribution to Employment :
Agriculture provides employment opportunity for rural people on a large scale in underdeveloped and developing economy. It is an important source of livelihood.
Contribution to Export:
The progress in agricultural sector provides surplus for increasing the exports of agricultural products.
Source of Food supply
Pre Requisite for raw materials
Creation of infrastructure.
Relief from shortage of capital
Helpful to reduce Inequality
Improving rural welfare
Create effective demand
Contribution to capital formation.
Extension of market size.
