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To be considered an economic good, a commodity or service must be transferable and provide utility - Leaving Cert Economics - Question 3 - 2009
Question 3
To be considered an economic good, a commodity or service must be transferable and provide utility. Explain the underlined terms. Transferable: Utility:
Worked Solution & Example Answer:To be considered an economic good, a commodity or service must be transferable and provide utility - Leaving Cert Economics - Question 3 - 2009
Step 1
Transferable:
Answer
A commodity is considered transferable when the ownership of that commodity can be transferred from one individual to another without any hurdles. This implies that the seller must have the legal right to sell the good or service, and the buyer must have the ability to acquire it. The notion of transferability ensures that economic goods can be exchanged in a market, facilitating trade and commerce.
Step 2
Utility:
Answer
Utility refers to the satisfaction or benefit that a consumer derives from consuming a commodity or service. An economic good must have the ability to meet the needs or desires of consumers, thereby providing them with satisfaction. Essentially, higher utility indicates greater consumer contentment, which influences demand and value in the marketplace.