The word "good " has two slightly different meanings. When a business man speaks of goods he means commodities, such as hay, wheat, clothing, and furniture. The student of economics gives the same word a broader meaning. He includes not only commodities, but also personal services rendered by domestic servants and others. No serious confusion, however, is likely to arise from this difference of meaning, for the laws and principles applying to commodities very generally apply to personal-services.

It is much more important to distinguish between free goods and economic goods. A free good is a gift of nature, supplied without labor and without limit. Economic goods, on the other hand, are characterized by their scarcity as compared to the demand for them. The best examples of free goods are air and sunlight, though in exceptional cases these may become economic goods. Water in a brook or spring may also be considered as free, despite the fact that some effort is always necessary to secure and utilize it. Free goods are extremely important in the life of human beings, yet the chief attention of students of economics must be directed toward economic goods.