Goods and Services
Modern business has responded to our increased wants by providing literally
thousands of different kinds of products for us to buy. There are two main types
of product: goods and services. Goods are physical object that we can see and
touch, such as a football. Services are non-physical products, such as education
or gardening. There are three main kinds of goods:
Non durable goods are goods, provided mainly for consumers, which do not last
very long, as they are used almost as soon as they are bought, for example food.
Durable goods are those which last much longer and will be kept until they
break, wear out or are replaced, such as cars and fumitory.
Organizational, or industrial, goods are goods which are supplied to other firms
or organizations to help them to make the goods they produce.
Factors of production
Four factors of production are involved in making every product. They
Land (including the sea)
Labor (the physical and mental efforts of workers)
Catital (the plant and machinery which allows workers to do their jobs).
Enterprise (the skills of entrepreneurs who can see business opportunities and
take the risk of exploiting or using them)
All of these factors are in short supply, either because there is a natural
shortage or because the resources are in the wrong place or of the wrong kind.
The Many uses of land
Land is used to grow food, graze animals and grow trees. The land also contains
a variety of natural substances, such as oil, gold, iron ore, sand and clay,
which are used to manufacture goods.
Although it might appear that there is a surplus of land, much of it cannot be
used because it is uncultivated rainforest, desert or permanently covered by
ice. There may be a great surplus of land which no one particularly wants in
some parts of the country, such as the Scottish islands, but a great scarcity of
land in other places, such as the centre of Birmingham or London.