Questions about Service (economics)
Short answers, pulled from the story.
What is a service in economics?
A service in economics is an act or use for which a consumer, company, or government is willing to pay. Examples include the work done by barbers, doctors, lawyers, accountants, mechanics, banks, and insurance companies. Services are intangible acts or performances in which the provider gives value to the consumer.
What are the three characteristics of a service?
Services have three characteristics: intangibility, perishability, and variability. Intangibility means a service cannot be manufactured, transported, or stocked. Perishability means it cannot be stored and vanishes once rendered, while variability means each service is unique and can never be exactly repeated.
What is the difference between a good and a service?
A good is an object of value over which ownership rights can be established and exchanged, while a service is an intangible act that is produced and consumed at the same time and cannot be stored. Gustofsson and Johnson describe a continuum with pure service at one end and pure commodity good at the other, with most products falling in between.
What did Adam Smith say about services in The Wealth of Nations?
Adam Smith, in The Wealth of Nations published in 1776, distinguished between productive and unproductive labor. He argued that productive labor created goods that could be stored and exchanged, while unproductive labor created services that perished at the time of production and therefore did not contribute to wealth.
What are public services in economics?
Public services are services that society as a whole pays for, whether organized as a nation state, fiscal union, or region. Examples include hospitals, elementary schools, and libraries.
What are examples of service industries?
Service industries span many sectors, including consulting, customer service, construction trades, death care, dispute resolution, education, entertainment, financial services, health care, hospitality, logistics, personal grooming, public utilities, and social services. Specific examples range from electricians and coroners to banks, movie theatres, and water utilities.