ECONOMIC GOODS AND THEIR VALUATION 33 



temporarily in the class of absolutely scarce goods. Potatoes 

 would serve as another example of temporary absolute-scarcity 

 goods. 



Goods must be both useful and scarce in order to be 

 classed as economic goods. Goods may be useful because they 

 possess certain physical and chemical properties ; for example, 

 wheat contains starch and gluten which makes it a valuable 

 food, and cotton fiber possesses tensile strength which makes it 

 useful in the manufacture of cloth. This is called elementary 

 utility. Goods are useful because of the elements they possess. 

 Wheat when transformed into bread has additional utility. 

 Cotton fiber has additional utility when transformed into 

 clothing. This kind of utility is called form utility. 



When the flour and the clothing have been manufactured, 

 they may be a long way from the men who are to use them. 

 By shipping them to the places where they are most wanted 

 they are more useful. In this way place utility is added to them. 



The wheat crop is harvested largely in one season and con- 

 sumed the year around. Those who store the wheat or flour 

 for many months in order that consumers may eat bread the 

 year around have added time utility to these goods. 



It has been suggested that the advertiser adds utility to the 

 goods. The fact would seem to be that advertising operates 

 on the prospective consumer rather than upon the goods and 

 changes his state of mind regarding the goods. This may in- 

 crease the individual estimate of the importance of a given 

 elementary utility or a given form utility. 



Some goods will stand long shipment and long storage with- 

 out danger of deterioration. For example, wheat, wool, and 

 lumber are in little danger of deteriorating in shipment and 

 storage. These we shall call durable goods. Other goods are 

 in great danger of deterioration in transit and cannot be kept 

 long in their original form. Strawberries and milk are examples. 

 They have commonly been called perishable goods. One of the 

 triumphs of modern inventive genius is the successful conver- 

 sion of perishable goods into durable goods by dehydration, 

 canning, and other methods of preserving. 



D 



