CHAPTER IV 

 ECONOMIC GOODS AND THEIR VALUATION 



The purpose of farming is to produce goods which are needed 

 directly or indirectly to satisfy the wants of man. Any material 

 thing or personal service which directly or indirectly satisfies 

 a human want is called a good. Tobacco satisfies a want, 

 hence it is a good, in the sense in which the word is used in 

 economics. It may seem like a paradox to call a bad thing a 

 good ; but this will be understood when one bears in mind that 

 it is economic qualities rather than moral qualities that are here 

 being considered. Goods satisfy desires. Desires may be 

 moral or immoral. Ruskin divides all goods into two classes, 

 those the use of which he approves he calls wealth, those the 

 use of which he disapproves, because he thinks they are detri- 

 mental to man, he calls " illth." 



Economic goods. Some useful goods are generally found 

 without any effort on the part of man in great abundance in the 

 form, at the place, and at the time they are needed. Such 

 goods are called free goods. Air, for example, is a free good. 

 But when a person commences to make a list of the things he 

 wants, he finds free goods rather infrequent on the list. For 

 most goods some effort must be put forth in order to secure a 

 ,supply. For example, farm products, the products of the mines, 

 and the products of the factories all require effort in their pro- 

 duction, hence they are limited in quantity and are called 

 economic goods. 



Causes of scarcity. Goods which can be increased in supply 

 indefinitely by the use of land, labor, and capital are scarce 

 because of the labor and sacrifice required in their production. 

 This may be called cost of production scarcity. This class in- 

 cludes most agricultural products. It will be recognized that 



