Free good
Encyclopedia
Free goods are what is needed by the society and is available without limits. The free good is a term used in economics
to describe a good that is not scarce
. 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. For example, a shop might give away its stock in its promotion, but producing these goods would still have required the use of scarce resources.
Examples include ideas and works that are reproducible 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.
Earlier schools of economic thought proposed a third type of free good: resources that are so abundant in nature that there is enough for everyone to have as much as they want. Examples in textbooks included fresh water and the air that we breathe. However, these are now regarded as common good
s because competition for them is rivalrous.
Copyright
s and patent
s have the effect of converting some goods to scarce goods by law.
Although these goods are free goods (in the economic sense) once they have been produced, they do require scarce resources, such as skilled labour, to create them in the first place. Thus these laws are sometimes used to give exclusive rights to the creators of such "intellectual property
" in order to encourage resources to be appropriately allocated to 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.
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
to describe a good that is not scarce
Scarcity
Scarcity is the fundamental economic problem of having humans who have unlimited wants and needs in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. Alternatively, scarcity implies that not all of society's goals can be...
. A free good is available in as great a quantity as desired with zero opportunity cost
Opportunity cost
Opportunity cost is the cost of any activity measured in terms of the value of the best alternative that is not chosen . It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the...
to society
Society
A society, or a human society, is a group of people related to each other through persistent relations, or a large social grouping sharing the same geographical or virtual territory, subject to the same political authority and dominant cultural expectations...
.
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 producing these goods would still have required the use of scarce resources.
Examples include ideas and works that are reproducible 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.
Earlier schools of economic thought proposed a third type of free good: resources that are so abundant in nature that there is enough for everyone to have as much as they want. Examples in textbooks included fresh water and the air that we breathe. However, these are now regarded as common good
Common good (economics)
Common goods are defined in economics as goods which are rivalrous and non-excludable. Thus, they constitute one of the four main types of the most common typology of goods based on the criteria:...
s because competition for them is rivalrous.
Copyright
Copyright
Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time...
s and patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
s have the effect of converting some goods to scarce goods by law.
Although these goods are free goods (in the economic sense) once they have been produced, they do require scarce resources, such as skilled labour, to create them in the first place. Thus these laws are sometimes used to give exclusive rights to the creators of such "intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
" in order to encourage resources to be appropriately allocated to these activities.
Many futurists theorize that advanced nanotechnology
Nanotechnology
Nanotechnology is the study of manipulating matter on an atomic and molecular scale. Generally, nanotechnology deals with developing materials, devices, or other structures possessing at least one dimension sized from 1 to 100 nanometres...
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.