Operational transformation processes:-
A transformation process is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides outputs for customers or clients.
– free goods vs. scarce goods
A free good is a good that is not scarce and therefore is available without limit. A free good is available in as great a quantity as desired with zero opportunity cost to society. A good that is made available at zero price is not necessarily a free good.
SCARCE GOOD: … A synonymous term for scarce good is an economic good. Adding the word “scarce” before the word “good” signifies that a good has limited availability relative to desired use and is thus subject to economic analysis. A scarce good is typically exchanged through a market.
A free good is a good with zero opportunity cost. This means it can be consumed in as much quantity as needed without reducing its availability to others.
A free good contrasts with an economic good (a good where there is an opportunity cost in consumption)
Examples of Free Good
- Air. Oxygen is something we need and we can simply breathe it in. There is no element of rivalry (e.g. if I breathe, there is still enough air for you to breath too.)
- Water. In many environments water will be a free good, e.g. if you live next to a river, a small community can easily take as much water as it wants with very little effort. If you take water from a river – there is plenty available for everyone else.
- However, water could become an economic good in dry environments. In desert areas, water is not in plentiful supply; society has to devote many resources to the production of drinking water. Therefore, water becomes scarce and so it is no longer considered a free good. These are sometimes known as a ‘common good’ as it is freely available to all but at a certain point, there is a limited supply.
- Intellectual ideas. If you develop a new invention and don’t patent it (e.g. yoga exercises, how to tie a knot) anybody can reuse this idea without any opportunity cost.
- Web-page. If you view a web-page, it doesn’t prevent anyone else consuming the good – it is still available at no opportunity cost.
- Sunlight. Sunlight is available to all.
- Unless your neighbour grows a leylandii hedge and casts your garden in shade.
- By-products. If heat is generated from a recycling plant, this creates a good – heat at no opportunity cost.
- Music. Once a song is composed, everyone is free to sing the tune.
An intangible good is a good that does not have a physical nature, as opposed to a physical good (an object). Digital goods such as downloadable music, mobile apps or virtual goods used in virtual economies are all examples of intangible goods. In an increasingly digitized world, intangible goods play a more and more important role in the economy. Virtually anything that is in a digital form and deliverable on the Internet can be considered an intangible good. In an ordinary sense, an intangible good should not be confused with a service, since good is an object whereas a service is labour. So a haircut is a service, not an intangible good.
According to economics, a good is an object or service that increases utility, directly or indirectly. According to this definition A, intangible goods include services.
In macroeconomics and accounting, a good is contrasted with a service. A good is defined as an object whose consumption increases the utility of the consumer, In the most restricted sense, some people argue all objects are physical, and the resulting definition B leaves no place for intangible goods and classifies all of them as services. In a more ordinary sense, and a middle ground between definition A and B, an object can be intangible, and we have the definition C of good.
Normal goods are goods whose demand increases with an increase in consumers’ income. Note that the rate at which demand increases is lower than the rate at which income increases. The rate eventually slows down with further increases in income. Examples of goods are furniture, clothes, and automobiles.
Real value is nominal value adjusted for inflation. The real value is obtained by removing the effect of price level changes from the nominal value of time-series data, so as to obtain a truer picture of economic trends. The nominal value of time-series data such as gross domestic product and incomes is adjusted by a deflator to derive their real values.
input goods vs. output goods
Input is the process of taking something in. For example, when a company takes in a raw material to make a finished good, they are receiving an input. Output is the exact opposite, in that it is the process of sending something out. … For example, some inputs might be money, supplies or knowledge, or labor.
Durable goods are those goods that don’t wear out quickly and last over a long period. Examples of durable goods include land, cars, and appliances. While non-durable goods or soft goods are those goods that have a short life cycle.
Industrial goods are bought and used for industrial and business use. Consumer goods are ready for the consumption and satisfaction of human wants. While industrial goods are made up of machinery, plants, and raw materials, consumer goods are commodities purchased by a buyer like clothing, food, and drinks.
What is the market ?
Market = virtual or real place where a supply of products meets the demand for those products and prices are established • Markets consist of all economic entities that offer and demand goods that can replace each other.
a regular gathering of people for the purchase and sale of provisions, livestock, and other commodities.
an area or arena in which commercial dealings are conducted.
The labor market, also known as the job market, refers to the supply and demand for labor in which employees provide the supply and employers the demand. It is a major component of any economy and is intricately tied in with markets for capital, goods and services.