Economic goods Definition An economic

• Economic goods • Definition: An economic good is any good that is insufficient to satisfy all our wants, i. e. it is scarce. • As people prefer to have more of it, they are willing to pay for it or to give up something to get it. And the opportunity cost of it in production is positive.

• The 9 -year free education in Hong Kong, from the point of view of the Whole Society, it is not ‘free’. • On one hand, at lease some people in Hong Kong prefer to have more free education at this moment. • On the other hand, the resources used in providing free education have alternative uses, i. e. the resources are scarce. In other words, the provision of free education involves opportunity cost to the society.

• Definition: Any good whose quantity is sufficient to all satisfy all our wants, i. e. it is not scarce. • As people do not prefer to have more of it, they will not pay for it or to give up something to get it. The opportunity cost of it in production is zero. So the 9 -year free education is not a free good.

• Air is a free good in normal circumstances but it is “ scarce” under water or at the top of a mountain. • Oxygen on low land is free good because its quantity available can satisfy all our wants. • Ice in North and South Poles is free good because no one prefers more of it.

• Definition: Goods produced for direct use of consumption. • E. g. Air-conditioner, television and telephone used at home. telephone television Air-conditioner

• Definition: Goods produced for production of other goods. • E. g. telephone used in airport because those telephones used in the airport are produced for assisting the production of airport service. coin telephone

• Definition of Quantity demanded: Quantity demanded is the planned quantity consumers are willing and able to buy at a given price. • Change in quantity demanded: It is caused by a change in a good’s price and it is shown by a movement along the demand curve. increase in quantity demanded decrease in quantity demanded

• In the summer holiday, many students are ready for back to school. They need to buy schoolbag before they go to school. To attract more business, many companies will lower the price of schoolbag. • As the price of schoolbag decrease, the quantity demanded of schoolbag will increase. It is shown by a movement along the same demand curve because it is caused by its price change. Increase in quantity demanded for schoolbag

• Definition of Demand: Demand refers to quantity demanded at all given prices. • Change in Demand: It is caused by change in non-price factors like weather and taste. It is showed by a shift of the demand curve. Increase in demand Decrease in demand

• Hong Kong is facing the economic recession nowadays, therefore the income of people decreases. As they earn less money than before, they will travel less by taxi. As a result, the demand for taxi will drop. • In this case, taxi is a normal good. Decrease in demand for taxi

• Hong Kong is facing the economic recession nowadays, therefore the income of people decrease. As they earn less money than before, more people will prefer to have bread as their lunch. As a result, the demand for bread will increase. • In this case, bread is an abnormal good. Increase in demand for bread

Group members: Ricky (27) Emily (29) Yumi (34) ~The end~