Economics, 11 edition

Book Preface

Economists talk about goods and bads. A good is anything that gives a person utility, or satisfaction. Here is a partial list of some goods: a computer, a car, a watch, a television set, friendship, and love. You will notice from our list that a good can be either tangible or intangible. A computer is a tangible good; friendship is an intangible good. Simply put, for something to be a good (whether tangible or intangible), it only has to give someone utility or satisfaction.

A bad is something that gives a person disutility, or dissatisfaction. If the flu gives you disutility or dissatisfaction, then it is a bad. If the constant nagging of an acquaintance is something that gives you disutility or dissatisfaction, then it is a bad.

People want goods, and they do not want bads. In fact, they will pay to get goods (“Here is $1,000 for the computer”), and they will pay to get rid of bads (“I’d be willing to pay you, doctor, if you can prescribe something that will shorten the time I have the flu”). Can something be a good for one person and a bad for another person? Smoking cigarettes gives some people utility; it gives others disutility. We conclude that smoking cigarettes can be a good for some people and a bad for others. This must be why the wife tells her husband, “If you want to to smoke, you should do it outside.” In other words, “Get those bads away from me.”