What is the difference between the concepts of benefit and service. The concept of good, product and service. Material and intangible benefits

This chapter is devoted to the study of the main objects of the modern market economy, namely goods and money. Individual schools of economics paid great attention to these categories of the market economy, examining them from different angles and interpreting their essence in different ways.

The concepts of "good", "goods" and "services"

Money as a developed form of commodity relations

The simplest answer to the question, what is money, would be this: money is everything that is usually accepted in exchange for goods and services.

Indeed, in the past, many things were used as money - shells, ivory, salt, etc. But this answer is not scientific.

There are various scientific concepts of the origin and essence of money, including rationalistic and evolutionary.

The rationalist concept explains the origin of money as the result of an agreement between people who are convinced that special tools are needed to move values in the exchange of goods. This idea of money as a contract reigned supreme until the end of the 18th century. A subjective psychological approach to the origin of money is also present in the views of many modern bourgeois economists.

So, P. Samuelson defines money as an artificial social convention. The American economist J.K. Galbraith believes that the consolidation of monetary functions for precious metals and other objects is a product of an agreement between people. Thus, money is a product of an agreement between people.

According to the evolutionary concept of the origin of money, they arose as a result of the development of the social division of labor, exchange, commodity production. Having studied the historical process of the development of exchange and forms of value, one can understand how one commodity stood out from the total mass of goods, which plays the role of money and whose special function is to fulfill the role of a universal equivalent. This concept is shared by both the neoclassical and the Marxist schools.

According to Marxism, in order to understand the essence of money, it is necessary to trace the historical development of forms of value. Four forms are known: simple or casual; full or detailed, universal and monetary.

At an early stage in the development of human society, commodity exchange was random, episodic. A simple or random form of value corresponded to it: commodity A is equal to commodity In this example, commodity A expresses its value in another commodity, therefore it is in the relative form of value. Commodity B serves as an equivalent (equivalence) of the value of commodity A, therefore, it is in the equivalent form of value.

The full, or expanded, form of value reflects a higher stage in the development of exchange, when other goods are equated to one commodity.

There are many equivalents here. This form of value shows that all goods are commensurable with each other.

The further development of commodity production and exchange leads to the gradual disappearance of the direct exchange of one commodity for another and the emergence of a universal form of value, in which

The universal form of value is characterized by the fact that all commodities begin to be exchanged for one commodity, which plays the role of a universal equivalent - a means of expressing the value of the entire commodity world. In different places, the role of a universal equivalent was played by different goods: cattle, and furs (in Russia - coons), and salt, and amber, and shells, etc.

With the development of commodity production, the abundance of various goods playing the role of a universal equivalent came into conflict with the consumers of the growing market. The latter required a transition to one equivalent. The role of the universal equivalent is assigned to one commodity, a monetary form of value arises, which is assigned to precious metals (gold and silver) and can be represented by the formula:

Gold became money in the process of the historical development of forms of value because it possessed a set of qualities that allowed it to perform the function of a universal equivalent better than other commodities. These include:

long-term storage;
easy divisibility and connectivity without loss of value;
high cost in small quantities;
the relative rarity of gold in nature;
high-quality uniformity of all parts during division.

From the function of money as a means of payment, credit money arises - bills of exchange, banknotes, checks. Credit money also includes deposit money (as a system of interbank settlements), as well as electronic money (a computer-based settlement system, the SWIFT system), "plastic money", "credit cards" American Express, Union, etc.

In circulation, pre-monetary equivalents of various kinds were used, as well as billon, metallic money, the nominal value of which exceeded the value of the metal contained in them. The share of settlements with cash is much lower than non-cash settlements with the help of credit money.

Real money is used as a means of payment: gold, coins, paper money, credit money.

World money. Money functions not only within the country, but also in circulation between countries. Here they perform the function of world money. Going beyond the limits of internal circulation, money sheds its national uniforms, erases the local scale of prices and appears in its original form - the form of gold bars.

They act as:

world money;
general measure of value;
universal means of payment;
general purchasing agent;
universal embodiment of social wealth.

All functions of money are organically linked. The essence of money is manifested not in any one function, but in all functions.

Studying the origin of money, its essence and evolution is the most important condition for understanding the nature of modern money and its effective use in a market economy.

Evolution of money in the monetary system of an industrial society

Excessive expenditures on the means of circulation, which only change the forms of value and cause the replacement of monetary units in the form of gold with credit and paper money, which increases the efficiency of the means of circulation and the speed of circulation of money, are not rational.

The crowding out of gold with credit money occurs through the use of credit cards. The first credit card appeared in the United States in 1915 in the form of a debt card. It combines payment and settlement and credit functions and is a kind of nominal check substitute. The card is made of plastic in the form of a rectangle 86 x 54 mm in size, issued to customers by special companies and banks, it must have the owner's surname and signature. At the time of purchasing the goods, instead of paying in cash or issuing a bearer's check, a credit card is given. The seller enters the card number into the invoice and after the customer signs the product, it is considered purchased. The invoice is sent to the bank, which pays it and writes the corresponding amount to the card debt account. The entry is made once a month, so the owner sometimes actually uses an interest-free loan for 30 days. There are various types of credit cards in circulation: revolving (cards have a limit, after the debt is repaid according to the limit, it is resumed) - these are "Visa", "Express", etc .; one-month - for example, "American Express", "Diners Club"; in which the maturity date of the debt is indicated - the end of the month; branded - "American Express", "Trustcard", which pay various office expenses; premium or "gold" - "Alex Gold Card", "Gold Mastercard", "Premier Card Visa", these cards do not have a limit, give the right to a loan at a preferential rate, provide solid insurance against accidents and hotel reservations.

In the mid-1980s, there were approximately 137 million Visa cardholders worldwide, with an annual turnover of $ 107 billion. By the end of the 1980s, turnover had doubled. In Russia, the first credit cards were issued in 1993.

The next stage in the evolution of money was the issuance of debit cards, which became widespread thanks to the automatic cash dispensing system. This computer-aided settlement system was named "electronic money". A "smart card" is becoming widespread in the world today, in which a micro calculator operating on semiconductors with an integrated circuit is mounted, has its own memory, in fact it is an electronic checkbook.

Bank cards have evolved from branded to local, regional, then national and now international settlements. So, now advertised "Eurocard" issued by the leading banks in Western Europe. The well-known system SWIFT (translated from English - "Society of International Interbank Telecommunications") is a system of electronic transmission of information on international bank settlements via satellite communications.

In the world market, the function of world money today is performed not by gold, but by currency - a monetary unit used to measure the value of a commodity.

The concept of "currency" is used in three meanings: the monetary unit of a given country; banknotes of foreign states, as well as credit and means of payment in international settlements, expressed in a foreign currency - monetary currency; international monetary unit and means of payment (ECU). An important condition for the functioning of world money is the different quality of the monetary product, its convertibility.

So, if gold is being replaced everywhere by paper money, then the question arises: what is the nature and essence of modern money?

In Western economic literature, this issue has been discussed for the second century, a great many points of view have been expressed, in most cases they agree on one thing - they deny the commodity nature of modern money. The main difference between these positions is that some economists define the nature of money as liquidity, while others consider the essence of money as fiat money.

The modern paper-credit monetary system is called "fiduciary" (translated from Latin - "a transaction based on trust").

The stability of modern money today is determined not by the gold reserve, but by the amount of paper money required for circulation.

According to Marxist theory, the amount of money needed for circulation is determined by the formula:

Where KD is the amount of money in circulation; СцТ - the sum of the prices of goods to be sold; K - the sum of the prices of goods sold on credit; P - the amount of payments on loans, the due date of which has come; В - the amount of mutual payments; CO is the rate of turnover of a monetary unit, expressed by the average number of its revolutions.

Most Western economists use a mathematical formula proposed by the American economist I. Fisher (known as the "equation of exchange"), showing the dependence of the price level on the money supply:

Where M is the money supply; V is the velocity of money circulation; P is the level of commodity prices; Q is the number of goods in circulation.

In accordance with this formula, the volume of the money supply can be determined by the formula:

and the level of commodity prices is determined by the formula:

Fisher's formula allows, in the first approximation, to explain the phenomenon of inflation. Inflation is a violation of the law of monetary circulation, which manifests itself in an excess of money supply in circulation in comparison with the real needs of their circulation, or the depreciation of money, accompanied by an increase in commodity prices.

Indeed, world experience shows that an increase in the money supply will inevitably cause an increase in inflation in 2-3 months. So, for 1988-1992. the average annual growth rate of money supply in the United States was 5.41%, and the average annual inflation rate was 4.9%, in France, respectively, 10.6 and 2.9%, in Japan - 5.6 and 2.2%. Rapid economic growth in Germany and Japan has had an impact on the decline in inflation rates in these countries. In Russia, with a significant reduction in production, the average monthly rate of growth of money in 1993 at 17.3% caused inflation with a growth rate of 20-25% per month.

Closely related to the depreciation of paper money are economic phenomena such as devaluation and denomination.

Devaluation means a depreciation of the national currency against gold, silver or any other currency. In most cases, this is accompanied by the appearance of a large number of zeros on banknotes.

Denomination is the opposite of devaluation; it is the consolidation of the country's monetary unit.

Denomination is a purely technical procedure, as a result of which the money supply in circulation does not increase, the number of old notes being withdrawn from circulation will be equal to the number of new banknotes being put into circulation. In most cases, the enlargement factor is one with one or more zeros (10, 100, 1000 and more). At this ratio, previously issued banknotes are exchanged for new ones. At the same time, commodity prices, tariffs for services, wages, etc. are recalculated using the same coefficient.

In the former USSR, the denomination was carried out several times. In 1922, 1 rub. new money was equated to 10 thousand rubles. with old money. In 1923, 1 rub. equated to 100 rubles. release in 1922 or 1 million rubles. banknotes of all previous issues. Then in the USSR in 1924 another denomination took place, in which 1 new ruble was equal to 20 thousand rubles. in Soviet signs of the 1923 model, or 50 billion rubles, issued in circulation before 1922, and the exchange was limited to April 30, 1924, when 1 new ruble was equal to 10 old ones. On January 1, 1998, the last one took place in the XX century. denomination of the ruble in Russia and replacement of circulating rubles for new ones in the ratio of 1000 rubles. old model to 1 rub. in new money. At the same time, throughout 1998, both old and new banknotes were circulating in parallel. By January 1, 1999, all old-style banknotes were basically withdrawn by the Bank of Russia from circulation and stopped serving money circulation. But they will be obligatory for the exchange of institutions of the Bank of Russia until December 31, 2002.

The evolution of money was reflected in the change in their functions. Thus, the function of a medium of circulation ceased to play the role of a spontaneous regulator of the money supply in circulation. This can be explained by the fact that when non-exchangeable banknotes are circulated, gold cannot automatically pass from the treasure to circulation and vice versa, which was possible under the gold standard. Today, gold continues to function as a treasure, but on a limited scale.

In conditions of economic, political, and monetary instability, gold acts as a treasure, as a kind of insurance fund for the state and individuals.

Gold reserves guarantee states and individuals relative economic independence. State and private gold reserves act as universal wealth. In the gold markets, credit money is exchanged for gold. The enormous accumulation of gold is a confirmation of the role of gold as a means of forming treasures.

Credit and paper money cannot perform the function of a means of forming treasures, since they have no value of their own. But they have a representative value and act as a means of accumulation. In the conditions of commodity production, accumulation takes place in the form of money. Money in the function of accumulation serves the process of reproduction (production, distribution, exchange, consumption).

As for world money, in modern conditions there have been changes in them:

as functional forms of world money, convertible (exchangeable for foreign currencies) national credit money and international accounting monetary units (SDR) and ECU are widely used;
gold is used only in extreme cases to pay off the balance of payments and indirectly through preliminary sale in national currencies in which international obligations are expressed.

Existing in the 16th and 17th centuries. the metallic theory of money identified money with precious metals, considering gold and silver as the only type of money, and recognized only those functions for which only metallic money was required (a measure of value, a store of value, world money). Supporters of the modern metal theory defend the need for a gold standard, arguing that today the role of gold as a monetary commodity does not seem to be decreasing, as evidenced by the desire of central banks to collect as much gold as possible in their vaults. This idea of returning to the gold standard is unrealistic, because economic development is unthinkable without a broad system of state regulation of the sphere of money circulation and credit. The latter is not compatible with the gold standard system.

Thus, despite the huge stream of research in the entire centuries-old history of human thought, the questions of the nature, essence and efficiency of using money continue to remain unclear to the end. The famous English economist W. Jevons figuratively put it this way: "Money for economic science is the same as squaring a circle in geometry."

With the analysis of money, we conclude the study of the main economic forms (commodity and money) of commodity wealth in a market economy.

The economic life of society is based on the need to satisfy the needs of people for various economic benefits. In turn, these benefits are produced on the basis of economic resources that are at the disposal of society and its members.

Economic needs and benefits

All people have different needs. They can be divided into two parts: spiritual and material needs. Although this division is conditional (for example, it is difficult to say whether a person's need for knowledge belongs to spiritual or material needs), however, for the most part it is possible.

The concept of economic needs and benefits

Material needs can be called economic needs. They are expressed in the fact that we want various economic benefits. In turn, economic benefits - these are material and non-material objects, more precisely, the properties of these objects, capable of satisfying economic needs. Economic needs are one of the fundamental categories in economic theory.

At the dawn of mankind, people satisfied economic needs at the expense of the ready-made goods of nature. Subsequently, the vast majority of needs began to be satisfied through the production of goods. In a market economy, where economic goods are bought and sold, they are called goods and services (often just goods, products, products).

Humanity is arranged in such a way that its economic needs usually exceed the possibilities of producing goods. They even talk about the law (principle) of raising needs, which means that needs grow faster than the production of goods. This is largely because as some needs are satisfied, others immediately arise.

So, in a traditional society, most of its members experience needs primarily in essential products. These are the needs mainly for food, clothing, housing, and basic services. However, back in the 19th century. Prussian statistician Ernest Engel proved that there is a direct relationship between the type of goods and services purchased and the income level of consumers. According to his statements, confirmed by practice, with an increase in the absolute amount of income, the share spent on essential goods and services decreases, and the share of expenses on less essential products increases. The very first need, moreover a daily one, is the need for food. That's why Engel's law finds expression in the fact that with an increase in income, their share going to the purchase of food decreases, and that part of income that is spent on the purchase of other goods (especially services), which is products that are not essential. The totality of all products produced for the satisfaction of material goods is called products.

Ultimately we come to the conclusion that if the growth of economic needs constantly outstrips the production of economic goods, then these needs are insatiable to the end, unlimited.

Another conclusion is that economic benefits are limited (rare, in the terminology of economic theory), i.e. fewer needs for them. This limitation is due to the fact that the production of economic benefits is faced with limited reserves of many natural resources, frequent shortages of labor (especially qualified), insufficient production capacity and finance, cases of poor organization of production, lack of technology and other knowledge for the production of a particular good. In other words, the production of economic goods lags behind economic needs due to limited economic resources.

Economic benefits and their classification

It is good for people. Is a means of satisfying human needs. It is for the sake of meeting the specific needs of people for benefits that economic activity is carried out in any country. The classification of goods is very diverse. Let us note the most important of them from the point of view of various classification criteria.

Economic and non-economic benefits

From the point of view of the limitedness of goods in relation to our needs, we are talking about economic goods.

Economic benefits- these are the results of economic activity that can be obtained in a limited amount in comparison with the needs.

Economic goods fall into two categories: goods and services.

But there are also such goods that, in comparison with the needs, are available in unlimited quantities (for example, air, water, sunlight). They are provided by nature without human effort. Such goods exist in nature "freely", in unlimited quantities and are called non-economic or free.

And yet the main circle is satisfied at the expense of not gratuitous, but economic benefits, i.e. those benefits, the volume of which:

insufficient to meet the needs of people in full;
can only be increased by additional costs;
have to be distributed in one way or another.

Consumer and production goods

From the point of view of consumption of goods, they are divided into consumer and production. They are sometimes referred to as commodities and means of production. Consumer goods are designed to directly meet human needs. These are the very end goods and services that people need. Production goods are resources used in the production process (machines, mechanisms, machinery, equipment, buildings, land, professional skills (qualifications).

Material and intangible benefits

From the point of view of material content, economic benefits are divided into material and intangible. Material goods can be felt. These are things that can accumulate and be stored for a long time.

Based on the period of use, there are material benefits of long-term, current and one-time use.

Intangible goods represented by services, as well as by such living conditions as health, human abilities, business qualities, professional skills. Unlike material goods, it is a specific product of labor, which basically does not acquire material form and whose value lies in the useful effect of living labor.

The useful effect of services does not exist separately from its production, which determines the fundamental difference between a service and a tangible product. Services cannot be accumulated, and the process of their production and consumption coincides in time. However, the results from the consumption of the services provided can also be material.

There are many types of services, which are conditionally divided into:

Communication - transport, communication services.
Distribution - trade, sales, warehousing.
Business - financial, insurance, audit, leasing, marketing services.
Social - education, health care, art, culture, social security.
Public - services of state authorities (ensuring stability in society) and others.

Private and public goods

Depending on the nature of consumption, economic goods are divided into private and public.

Private good provided to the consumer, taking into account his individual demand. Such a good is divisible, it belongs to the individual on the basis of private property rights, it can be inherited and exchanged. A private good is given to the one who paid for it.

Indivisible and belong to society.

First, it is national defense, environmental protection, lawmaking, public transport and order, i.e. those benefits that are enjoyed by all citizens of the country without exception.

Interchangeable and Complementary Benefits

Among the benefits, there are also interchangeable and complementary benefits.

Interchangeable goods are called substitutes. These goods satisfy the same need and replace each other in the process of consumption (white and black bread, meat and fish, etc.).

Complementary benefits or complements complement each other in the process of consumption (car, gasoline).

With all this, economic benefits are divided into normal and inferior ones.

To normal goods include those benefits, the consumption of which increases with the growth of the welfare (income) of consumers.

Lower blessings have the opposite pattern. With an increase in income, their consumption decreases, and with a decrease in income, it increases (potatoes and bread).

Commodity as a specific social form of the product of labor. A product as a blessing, a service that satisfies human needs. Goods as an object of exchange of activity. Exchange value. Comparison of goods based on the principle of equivalence of exchange, which is based on the equalization of different types of labor of different producers. Value as a definite historical form of existence of labor costs for the production of goods. The dual nature of labor producing a commodity.
A commodity is another social form of being a product of labor. Its qualitative difference from the product of the natural economy considered by us above is that the product is initially produced to meet the needs of other people (not the direct producers of this product). The only form of existence of the products of labor in the form of goods can be their exchange. So, a commodity is a product of labor, intended not for personal consumption, but for exchange. The product of labor is not a commodity outside of exchange.
It is easy to see that a product in the form we have defined, on the one hand, is a good or a service that satisfies certain human needs, on the other hand, it is an object of exchange of activity in the form of the actual products of labor. Thus, we must recognize that the commodity as an economic form is dual in nature1.
It seems to us that the consideration of a product as a product of labor that satisfies certain human needs is also quite fruitful, since science ultimately managed to prove that the consumer, being an economic entity, just like others (producers), compares in his activity, the result (the received utility, determined by him subjectively in monetary form) and costs in the form of the paid price of the goods. This approach is consistently studied in the corresponding section of microeconomics, which is based on the already mentioned neoclassical approach to examining economic realities at the level of an individual economic entity.
Within the framework of this manual, we will dwell in more detail on the analysis of the second side of the product - the object of exchange of activity.
So, the exchange of goods is not only an objective reality, but also the result of the natural development of the entire economic system, its material and material elements and the corresponding relations between people. This exchange acts as an exchange of equivalents, so now we have the right to pose the question in a practical plane: what is the basis for the exchange of goods and services of different quality (goods)? A sufficiently developed exchange is already analyzed here, the participants of which, relying on their own ideas about the equivalence of exchange, nevertheless take into account the generally accepted ideas about the equivalence of specific transactions. That is, there are already certain rules that are recognized by all. Above, we have already talked about the formation of the market institution.
Leaving aside subjective ideas, which, of course, can be important and significant, we need to highlight an objective basis for comparing different quality goods and services. What makes a pin and a suit comparable, for example? Obviously, we are dealing with various goods that satisfy various human needs. They are made of different materials, different types of labor were spent on their production, requiring different qualifications. But still, one thing remains in common, which, probably, will allow us to determine the objective basis for comparison within the framework of exchange transactions. Both the pin and the suit are the results of human labor, albeit of different quality. Therefore, it is precisely in equating different types of labor that we can look for some kind of objective basis for the equivalence of the exchange of goods.
A whole line of economic thought, represented by outstanding researchers such as W. Petty, P. Boisguillebert, F. Quenet, A. Turgot, A. Smith, D. Ricardo, K. Marx, was engaged in solving this important issue. This is the classic school of political economy. All representatives of this direction, analyzing the problem posed above, actually considered the cost of goods2.
It turns out that any product created by a manufacturer can be presented in the form of a certain “bunch” of human labor, devoid of a certain form and content, which appears before us in the form of a certain amount of average social working time (hours of average social, or socially necessary, time) 3.
Considering the problem of comparability of goods of different quality in the exchange process, we actually solve the problem of comparability and dimension in economic theory. Note that this problem is fundamental for any area of scientific knowledge. Economic theory is no exception here. Another thing is that in economic relations we cannot use kilograms, meters, amperes, moles, etc. All this will replace for us a certain amount of average social labor as a cost of labor in general. It is here that we will talk about cost.
We can define it as a certain amount of socially necessary labor time enclosed in a commodity, or a certain historical form of existence of labor costs for the production of a product of labor that enters into the process of exchange and thus takes the form of a commodity.
In reality, value is manifested in a certain quantitative proportion, in which goods are equated to each other in a specific exchange process. This proportion is most often defined as exchange value.
If we exchange 3 commodities A for 2 commodities B, then the exchange value will be equal to 3: 2, i.e., 3 commodities A contain the same amount of socially necessary labor as 2 commodities B. Note that the specific conditions for the exchange of commodities can, of course, distort the proportions discussed above (there is nonequivalence in exchange), therefore, proclaiming the principle of equivalence in exchange, considering socially necessary labor, value, exchange value, etc., we argue that this principle manifests itself in the end, and also when we consider the totality of social processes of exchange of all goods. By the way, in the latter case, the equivalence seems quite obvious, since nothing arises from nothing and, probably, does not disappear without a trace. That is, there is a certain economic form of existence of the well-known law of natural science - the law of conservation of energy and mass4.
In conclusion of this section, we have the right to return to the problem of labor that produces a commodity. If a commodity is a product of labor and appears before us as having a certain duality (goods that satisfy human needs (use value), as well as goods that are exchanged in a certain proportion for another good (value that materializes in a specific act of exchange in exchange value or proportion in which goods are exchanged)), then the labor that produces the goods must be dual. Note that logically this seems very simple. But if we try to remember how much humanity has gone to substantiate the conclusion about the dual nature of labor that produces the goods, we will see that this is a very difficult problem. Almost no one from the entire school of classical political economy was able to reliably answer this question. This was actually done by the last representative of this school - K. Marx.
On the one hand, labor that produces a commodity creates a specific good (use value), on the other hand, it creates value, which is (recall) a certain amount of average social, or socially necessary, labor. This duality is the internal contradiction of the commodity (between its private and public sides (the specific good is private, the cost of socially necessary labor, the cost is public)), which inevitably requires its resolution, which occurs in the process of separating a specific commodity from the commodity world - money ...
Before we move on to the analysis of money, this most complex quality, it is necessary to specifically consider the production of goods, or commodity production. It was already noted above that the exchange of products of labor, which take the form of a commodity, can be irregular, sporadic. This gives us the basis to separate commodity exchange and commodity production.

1Here we want to note that, having made a conclusion about the dual nature of the commodity, K. Marx in his further analysis refused to consider the commodity as a good satisfying certain human needs (the use value of the commodity in the Marxian interpretation), concentrating on the second side of the commodity, connected with its exchange (value).
2 Note that in the Russian language there is a synonym for the term value - value, which is now used quite often by some authors, who in this way try, unfortunately, to discard much that was done by predecessor economists. The cost, after all, was the subject of study not only by Karl Marx, but also by the aforementioned researchers. On the other hand, K. Marx is not only the founder of the direction in economic science (Marxism), but also one of the brightest representatives of classical political economy.
3Medium social, or socially necessary, labor is labor under average social conditions, average productivity and labor intensity.
4Note that the law of conservation of energy and mass actually operates in economic relations when a person interacts with the substance of nature about its transformation into elements of his own life. The substance of nature passes from one form to another, with the expenditure of energy in various forms (from muscular to the energy of fissioning atomic nuclei), as well as the loss of energy and matter. That is why waste-free production seems to be impossible. Disposal (or recycling) of waste requires additional energy costs, which may ultimately lead to less additional result, therefore the manufacturer refuses such costs, and the globe is filled with new waste from production and human activities.

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Ministry of Education and Science of the Russian Federation

Naberezhnye Chelny Institute (branch) of the Federal State Autonomous Educational Institution of Higher Professional Education

Kazan (Volga Region) Federal University

Department of Economic Theory and Economic Policy

Test

by discipline: “The concept of“ good ”,“ product ”,“ service ”. Product and its properties. Types of goods. Income effect and substitution effect "

Completed:

Group student 2142213

Zamilov A.R.

Checked by the docent:

Ermakov V.V.

Naberezhnye Chelny

commodity need economic income

Introduction

1. The concept of "good"

1.1 The concept of "product"

1.2 The concept of "service"

2.1 Properties of goods

2.2 Types of goods

Conclusion

Introduction

Since ancient times, people have mastered the skills of hunting, fishing, engaged in agriculture and picking berries and mushrooms, medicinal herbs, production: tools, clothing, building houses that make their work and life easier. But not everyone possessed such skills, some knew how to do something better and something worse. In this regard, they had to exchange goods of their own production, for goods needed at the moment, and those goods that they could not manufacture, or could, but there was no suitable material for the manufacture of this product. And here our ancestors came across the concept of value and value of value. Thus, the commodity has become the main chain in economic development.

So, in my test work, I decided to consider a product as an object, phenomenon, product of labor that satisfies a certain human need and meets the interests, goals, aspirations of people, and everything related to it, namely: properties and types of goods. I will also analyze the types of services, and such concepts as "good", "product", "service".

1. The concept of "good"

Good is everything that contains a certain positive meaning, object, phenomenon, product of labor that satisfies a certain human need and meets the interests, goals, aspirations of people.

There are other definitions of the good in the economic literature. A. Marshall, for example, understood good by all things we want or things that satisfy human needs. In this definition, goods are limited only to things, objects.

Sometimes benefits are viewed as embodied utility, which can be not only the products of labor, but also the fruits of nature.

The most common is the division of goods into tangible and intangible.

1) Material goods include: natural gifts of nature (earth, air, climate); manufactured products (food, buildings, structures, machines, tools, etc.). Sometimes material goods include (for example, A. Marshall) and relations of appropriation of material goods (patents, copyrights, mortgages). Thus, goods of different nature are combined into one group, some of which are the essence of utility, others are the form of appropriation of utility.

2) Intangible benefits are benefits that affect the development of human abilities, they are created in the non-production sphere: health care, education, art, cinema, theater, museums, etc.

There are two subgroups of intangible goods:

Internal - the benefits given to man by nature, which he develops in himself of his own free will (voice; singing, declamation; ear for music; playing music; ability to science, etc.);

External - this is what the outside world gives to satisfy needs (reputation, business relations, patronage, etc.).

In addition to the indicated groups of benefits, present and future benefits, direct and indirect, long- and short-term, etc. are also considered.

Of particular importance is the division of goods into economic and non-economic.

Economic benefits (this term belongs to the subjectivist school of economic science; the representative is the famous Italian economist A. Pesenti) are those that are the object or result of economic activity, i.e. which can be obtained in limited quantities in relation to the needs being satisfied. Note that the problem of the scarcity of goods is associated with the economic good, which determines the corresponding behavior of a person (economic production activity) in conditions of limited (scarcity) of resources, goods.

Non-economic benefits (gratuitous benefits) are provided by nature without human effort. These benefits exist in nature "freely", in an amount sufficient for the full and constant satisfaction of certain human needs (air, water, light, etc.).

Thus, it is the relationship between need (or, in the terminology of K. Menger, a prominent representative of the Austrian school, need) and the amount of goods available for disposal that makes them economic or noneconomic.

1.1 The concept of "goods"

A specific form of an economic good is a commodity. What is a commodity?

A commodity is a specific economic good produced for exchange.

K. Menger argued that an economic good becomes a commodity regardless of its ability to move, regardless of the persons offering it for sale, from its materiality, regardless of its nature as a product of labor, since it is necessarily intended for exchange.1

The product itself has two properties:

a) the ability to satisfy any human need;

b) suitability for exchange.

The ability of a product to satisfy one or another human need is its use value. Any product possesses it. The nature of the needs can be very different (physical, spiritual). The way to satisfy them can also be different. Some things can satisfy the need directly as commodities (bread, clothing, etc.); others - indirectly, indirectly as means of production (machine tool, raw materials). Many use values can satisfy not one, but a number of social needs (wood, for example, is used as a chemical raw material, as fuel, for the production of furniture).

Services are the goods. What is their specificity? The use value of the service has no material form. The use value of a service is the beneficial effect of activity, living labor.

A service has no material form, it cannot be accumulated directly, it can be consumed only at the time of production.

Use values constitute the content of the wealth of any society. Use value has three forms of manifestation ", a) quantity; b) natural form; c) quality. The latter is the degree of usefulness of a given use value, the degree of its conformity to the need, its suitability to satisfy the need in specific conditions of consumption.

1.2 The concept of "service"

Services are purposeful human activities, the result of which has a beneficial effect that satisfies any human needs.

The provision (rendering) of a service may include, for example, the following:

activities carried out on consumer-supplied tangible products (for example, repairing a faulty car);

activities carried out on a consumer-supplied intangible product (for example, drawing up an income statement required to determine the amount of tax);

provision of intangible products (for example, information in the sense of transfer of knowledge);

creating a favorable environment for consumers (for example, in hotels and restaurants).

The services provided to the population, according to their purpose, are divided into material and socio-cultural:

Material service - a service to meet the material and household needs of the consumer of services. Provides restoration (change, preservation) of consumer properties of products or the manufacture of new products by orders of citizens, as well as the movement of goods and people, creating conditions for consumption. In particular, material services may include household services related to the repair and manufacture of products, housing and communal services, catering services, transport services, etc.

Socio-cultural service (intangible service) - a service to meet the spiritual, intellectual needs and support the normal life of the consumer. Provides the maintenance and restoration of health, spiritual and physical development of the individual, improving professional skills. Social and cultural services can include medical services, cultural services, tourism, education, etc.

Services can be: private or commercial, voluntary or forced, paid or free, instant or long-term, reciprocal and anonymous, public, etc.

In the Russian Federation, the provision of services is regulated by the Civil Code, the Federal Law "On Protection of Consumer Rights", etc.

There are many definitions of the concept of a product. Here are a few of them:

A commodity is the result of a person's interaction with the means of production (personal and material factors of production), which takes on a material or non-material form.

A commodity is a specific economic good produced for exchange.

Karl Marx put forward such a definition of this concept: "A commodity is an external object (thing) that satisfies any human needs, due to its properties."

A commodity is a good that is the result of the production of one economic entity and enters the consumption of another entity through exchange in the form of purchase and sale. This definition hides a rather complex set of economic relations.

First, a product reflects a property relationship. Any product acts as an object of ownership. The owner of the goods is ready to transfer it to another in exchange for something of equal value.

Secondly, there is a relationship about the production of a good. These include relations that ensure specialization in the production of a particular product and the possibility of the emergence of cooperation on its basis. In the production of a product, a competitive relationship also arises, in the course of which manufacturers seek to make the product more attractive to buyers.

Thirdly, distributional relations develop with regard to the commodity. Since each commodity acts as a part of the social product, by selling and buying goods, people thereby participate in the distribution of this product.

Fourthly, the product becomes an object of consumption, since, ultimately, it is created to satisfy some needs.

The nature of economic relations arising about goods makes it possible to distinguish them from goods created by people, but not goods. These benefits include those that are produced by people for their own consumption. K. Menger argued that an economic good becomes a commodity regardless of its ability to move, regardless of the persons offering it for sale, from its materiality, but it is necessarily intended for exchange.

A distinctive feature of a product is the relationship in the form of purchase and sale. Exchange is characterized by retribution and equivalence, which means the transfer of goods from the hands of its owner to the hands of another in response to the return transfer of its substitute, while the substitute must be equivalent to the given commodity.

Along with the concept of "commodity" there is the concept of "commodity unit". A commodity unit is a separate integrity, characterized by indicators of size, price, appearance and other attributes. Each individual commodity offered to consumers can be viewed in relation to three levels:

By design, the product is the basic service that the buyer actually purchases;

a product in real performance is a product offered for sale with a certain set of properties, external design, quality level, brand name and packaging;

A reinforced product is an actual product, combined with accompanying services such as warranty, installation or assembly, preventive maintenance, and free shipping.

2.1 Properties of goods

The product has two main properties:

a) the ability to satisfy any human need.

b) the ability to exchange.

The ability of a product to satisfy one or another human need is its use value. Any product possesses it. The nature of the needs can be very different (physical, spiritual). The way to satisfy them can also be different. Some things can satisfy the need directly as commodities (bread, clothing, etc.), others - indirectly, indirectly as a means of production (machine, raw materials). Many use values can satisfy not one, but a number of social needs (wood, for example, is used as a chemical raw material, as fuel, for the production of furniture).

Use values constitute the material content of the wealth of any society. The consumer value has three forms of manifestation:

a) quantity;

b) natural form;

c) quality.

The latter is the degree of usefulness of a given use value, its correspondence, its suitability to satisfy the need in specific conditions of consumption. The buyer, purchasing a product on the market, evaluates its useful effect, and not the cost of labor for its production. Only what is valuable in the eyes of the buyer has value. People value a wide variety of material and spiritual goods and services not as a result of socially necessary labor expended on their production, but because these goods are useful. But for each individual product, different people give a different assessment of the usefulness. The subjective assessment of utility depends on two factors: on the available stock of this good and on the degree of saturation of the need for it. As the demand is satisfied, the "degree of saturation" increases, and the value of competitive utility decreases.

A commodity has not only the property of satisfying human needs, but also the property of entering into relations with other commodities, exchange for other commodities. Different goods have only one property in common that makes them comparable with each other in exchange, namely that they are products of labor. The neoclassical school emphasizes that a commodity is an economic good intended for exchange, but this definition does not indicate that a commodity is a product of labor. Supporters of the labor theory of value, starting with A. Smith, believed that goods in certain quantities are equal to each other because they have a common basis - labor. In this case, a necessary condition for exchange is the difference in the use values of goods. In modern economic theory, a different approach is adopted, which originates from the works of representatives of the theory of marginal utility: K. Menger, E. Boehm-Bawerk, F. Wieser. They expressed the idea that it is not labor value that underlies exchange, but utility. The ability of a commodity to exchange in certain quantitative proportions is exchange value.

2.2 Types of goods

In modern market conditions, firms are forced to develop different product classifications based on the characteristics of these products.

Based on the purposes of application, all goods can be divided into two groups - industrial goods and consumer goods.

Industrial goods and classified according to the degree of their participation in the production process (materials and parts, capital property, auxiliary materials and services).

Consumer goods are classified based on the purchasing habits of consumers (brochures, postcards, calendars, letterheads, business cards, labels, etc.).

The study of the consumer goods market is carried out in order to determine the capacity and nature of the market, the geographical location of a potential consumer, the structure and degree of market monopolization, the influence of trade-political and economic-geographical factors on long-term market development trends. In order to identify the goods of greatest demand and the location of consumers, the following classifications are used:

according to the degree of durability or material tangibility, goods can be divided into three groups:

Durable goods - tangible items that usually withstand repeated use (hardcover books);

non-durable goods - tangible products fully consumed in one or several cycles of use (newspapers, magazines);

services - objects of sale in the form of actions, benefits or satisfaction (services performed by a printing house, publishing house).

Based on the purchasing habits of consumers, there is a division of consumer goods into:

a) consumer goods - goods that the consumer usually buys often, without hesitation and with minimal effort to compare them with each other. Such goods can be further subdivided into:

Basic goods in constant demand (newspapers with a program), that is, those goods that people buy constantly;

Impulse buying products are purchased without any prior planning or searching, they are usually sold in many places, so consumers almost never specifically look for them (magazines);

Goods for emergencies are bought when there is an urgent need for them (Iz Ruk v Ruki newspaper); manufacturers arrange for the distribution of these products through multiple outlets so as not to miss out on a sales opportunity when a consumer suddenly needs these products.

b) goods of preliminary selection - goods that the consumer, in the process of choosing and purchasing, as a rule, compares with each other in terms of suitability, quality, price and appearance (fiction). Pre-selection items can be further subdivided into:

Similar - are considered by the buyer as products that are the same in quality, but differ from each other in price to such an extent as to justify their comparison with each other when purchasing;

Dissimilar - are considered by the consumer in relation to their properties to a greater extent than in relation to the price. That is why, when selling dissimilar pre-selection products, it is necessary to have a wide assortment to suit a wide variety of individual tastes, and to have a staff of well-trained salespeople who can provide the consumer with the necessary information and advice.

c) goods of special demand - goods with unique characteristics and / or individual branded goods, for the sake of which a significant part of buyers is ready to spend additional efforts (art albums);

d) goods of passive demand - goods that the consumer does not know or knows, but usually does not think about buying them (encyclopedia).

3. Income effect and substitution effect

The consumer most often uses the goods not individually, but in certain sets. A set of goods is a set of certain quantities of various goods consumed together in a certain period of time. The change in the price of one good, while the prices of other goods remain unchanged, is a relative change in the price of this good. In other words, a given good becomes cheaper (or more expensive) in relation to other goods. In addition, a change in the price of any good leads to a change in the real income of the consumer. Before the price of a given good was reduced, the consumer could purchase a smaller amount, and after a price reduction, more. He can also use the saved funds to purchase other goods. A change in the price of some good affects the structure of consumer demand in two ways. The volume of demand for a given good changes under the influence of changes in its relative price, as well as under the influence of changes in the real income of the consumer.

Any price change leads to the appearance of income and substitution effects, since it changes the amount of available goods and their relative prices. These effects are the consumer's response to changes in relative prices and real income.

The substitution effect is a change in the structure of consumer demand as a result of a change in the price of one of the goods included in the consumer set. The essence of this effect boils down to the fact that when the prices of one good rise, the consumer is reoriented to another good with similar consumer properties, but with a constant price. In other words, consumers tend to replace more expensive goods with cheaper ones. As a result, the demand for the initial good falls. For example, coffee and tea are substitute goods. As the price of coffee rises, consumers will find tea relatively cheaper to replace relatively more expensive coffee. This will increase the demand for tea.

Income effect - the impact on the structure of consumer demand due to a change in his real income caused by a change in the price of the good. The essence of this effect lies in the fact that when the price of any good decreases, a person can buy more of this good, without denying himself the acquisition of other goods. The income effect reflects the effect on the amount of demand of changes in the real income of the buyer. The fall in the price of one product has, albeit insignificantly, influence on the general level of prices and makes the consumer relatively richer, his real incomes, albeit insignificantly, but grow. His additional income received as a result of a decrease in the price of a given good, he can direct both to the acquisition of its additional units, and to increase the consumption of other goods.

For normal goods, the income effect and the substitution effect add up, since a decrease in the price of these goods leads to an increase in demand for them. For example, a consumer, having a given income that does not change, purchases in a certain ratio tea and coffee, which are normal goods. In this case, the substitution effect works as follows. The fall in the price of tea will lead to an increase in demand for it. Since the price of coffee has not changed, coffee is now relatively (relatively) more expensive than tea. A rational consumer replaces relatively expensive coffee with relatively cheap tea, increasing the demand for it. The income effect is manifested in the fact that the drop in the price of tea has made the consumer somewhat richer, that is, has led to an increase in his real income. Since, the higher the level of income of the population, the higher the demand for normal goods, and the increase in income can be directed both to the purchase of additional quantities of tea and coffee. Consequently, in the same situation (a drop in the price of tea at a constant price of coffee), the substitution effect and the income effect lead to an increase in the demand for tea. The income effect and the substitution effect are unidirectional. For normal goods, the effects of income and substitution explain the increase in demand when prices fall and the decrease in demand when prices rise. In other words, the law of demand is fulfilled.

For goods of the lowest category, the effect of income and substitution effects is determined by their difference. For example, a consumer, having this income, buys in a certain ratio a natural coffee and a coffee drink, which is a product of the lowest category. In this case, the substitution effect works as follows. The fall in the price of a coffee drink will lead to an increase in demand for it, since the drink is now a relatively cheap good. Since the price of coffee has not changed, coffee is a relatively (relatively) expensive boon. A rational consumer replaces relatively expensive coffee with a relatively cheap coffee drink, increasing the demand for it. The income effect is manifested in the fact that a decrease in the price of a coffee drink made the consumer somewhat richer, i.e., led to an increase in his real income. Since the higher the income level of the population, the lower the volume of demand for inferior goods, then the increase in the real income of the consumer will be directed towards the purchase of additional quantities of coffee. As a result, a decrease in the price of a coffee drink (a product of the lowest category) will lead to a drop in demand for it and an increase in demand for coffee (a product of a higher category). Consequently, in the same situation (a drop in the price of a coffee drink at a constant coffee price), the substitution effect leads to an increase in demand for a coffee drink, and the income effect leads to a decrease in demand for it. The income effect and the substitution effect operate in different directions.

For goods in the lowest category, the resultant of both effects depends on the degree of influence of each of them on consumer choice. If the substitution effect is stronger than the income effect, then the demand curve for the lower category product will have the same shape as the normal product. Thus, the law of demand is fulfilled. If the income effect is stronger than the substitution effect, then the volume of demand for a product of the lowest category falls when the price of this product decreases. In other words, the law of demand is not fulfilled here. Goods for which the law of demand is not satisfied are called Giffen goods, after the English economist of the 19th century, who theoretically substantiated such a phenomenon. The demand curve for Giffen's goods is shown in the figure.

Conclusion

need economic income

In order to satisfy its ever-growing needs, humanity is forced to constantly seek answers to the main questions of the foundations of economic life, that is, the main questions of the economy:

1. What and in what quantity to produce?

2. How to produce?

3. How to distribute the manufactured goods?

Solving the question, "What and in what quantity to produce?", People, ultimately, distribute limited resources between the producers of various goods.

Solving the question "How to produce?", People choose their preferred methods (technologies) for the production of goods that they need.

Each of the possible options for technological solutions assumes its own combination and scale of use of limited resources. And therefore, choosing the best option is not an easy task, which requires comparison, weighing the value of various resources.

Answering the question "How to distribute the manufactured goods?", People decide who and how many benefits should ultimately go to. How to distribute benefits so that it does not cause feelings of unfairness in people due to differences in the comfort of life?

People solved this problem like this:

- "the right of the strong" - the best and in full is received by the one who can take the benefits from the weaker by the force of his fist and weapon;

- “the principle of equalization” - everyone receives approximately equally, so that “no one is offended”;

- “the principle of the queue” - the benefit goes to the one who previously took a place in the queue of those who wish to receive this benefit.

Life has proven the harmfulness of using these principles, since they do not interest people in more productive work. With such a distribution of benefits, even if you work better than others and get more for it, the acquisition of the desired benefit is not guaranteed. Therefore, in the overwhelming majority of countries in the world (and in all the richest countries), a complex mechanism of market distribution currently prevails.

Bibliography

1. "Fundamentals of Economics", E.F. Borisov, 2008

2. "Economic theory. Economic systems: formation and development ", I.K. Larionova, S.N. Silvestrova, 2012

3. "State and Economy", Sokolinsky V.M., 1996

4. "Economy of the enterprise", Safronov N.A., 1998

5. "Economic analysis", Gilyarovskaya L.T., 2004

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