Free good facts for kids
In economics free good means a good that is available without production, and therefore not scarce. It is available in as much quantity as desired, with zero opportunity cost to society.
A good that is made available at zero price is not necessarily a free good. For example, a shop might give away its stock in its promotion, but for the production of these goods, resources were needed, so this would not be a free good in an economic sense.
There are three main types of free goods:
- Resources that are so abundant in nature that there is enough for everyone to have as much as they want. An example of this is the air that we breathe.
- Resources that are jointly produced. This type of free good is produced as a by-product of something else that is more valuable. Waste products from factories and homes, such as discarded packaging, are often free goods.
- Ideas and works that can be copied at zero cost, or almost zero cost. For example, if someone invents a new device, many people could copy this invention, with no danger of this "resource" running out. Other examples include computer programs and web pages.
Intellectual property laws have the effect of converting some goods to scarce goods by law. Although these goods are free goods (in the economic sense) when they have been produced, they did require scarce resources, such as artistic skill, to create them in the first place. Thus, intellectual property laws such as copyrights and patents are sometimes used to give exclusive rights to the creators of such "intellectual property", to make sure that people are interested in these activities.
Many futurists theorize that advanced nanotechnology with the ability to automatically turn any kind of material into any other combination of equal mass, will make all goods essentially free goods, since all raw materials and manufacturing time will become perfectly interchangeable.
