Meaning of Goods and Services

In economics, goods and services are combinedly called commodity.  Anything that can satisfy human wants are called commodity.
Goods refers to the tangible things that can satisfy human wants. It is an object that can touch and hold. It has certain shape and size. i.e., materials such as book, pen, car, food, cloths etc. are the examples of goods.
Services refers to the intangible things that can satisfy human wants.It is an action or performance of work. It does not have certain shape and size. i.e., non-materials like health, education etc. are the examples of services.

Classification/ Types of Goods:

Normal goods: 

Those goods which have negative price effect as well as positive income effect on its quantity demand are called normal goods.

It means that quantity demand of that goods increases with fall in its price and decreases with rise in its price and, the quantity demand of that goods increases with rise in income of the consumer and decreases with fall in income of the consumer.
More clearly, in case of normal goods, there is inverse relationship between price of normal goods and its quantity demand, and direct relationship between income of the consumer and its quantity demand.

Inferior goods: 

Those goods which have negative income effect on its quantity demand are called inferior goods. It means that the quantity demand of that goods decreases with rise in income of the consumer and increases with fall in income of the consumer. 
In case of inferior goods, there is negative relationship between income of the consumer and quantity demand for that goods.

Giffen goods: 

Those goods which have more quantity demanded at higher price are called giffen goods. The increase in demand of such goods with higher price is due to income effect outweighs the substitution effect. The concept of giffen goods was put forward by Robert Giffen. Giffen goods is limited to very poor communities with very limited choice of goods. Empirical evidence is hard to find about giffen goods.

Related goods: 

In economics, two goods (Say X and Y goods) are said to be related goods if the change in price of one goods (Px) leads to the change in quantity demand for another goods (Qy). They are either substitutes or complementary in nature.

1.Substitute goods: 

Two goods are said to be substitute goods if they provide similar satisfaction. For example: Tea and coffee, Coke and Pepsi etc. 
In the case of substitute goods, there is positive cross effect. That means when the increase in the price of one commodity, the quantity demand for another commodity increases and vice-versa. i.e., there is direct relationship between the price of one commodity and quantity demand for another commodity. 

2.Complementary goods: 

Two goods are said to be complementary goods if they are jointly demanded. without use of one goods another will be useless. For example, petrol and car, pen and ink etc.
In the case of complementary goods, there is negative cross effect. That means when the increase in the price of one commodity, the quantity demand for another commodity decreases and vice-versa. i.e., there is inverse relationship between the price of one commodity and quantity demand for another commodity.  

Private and Public goods:

Private goods:

Those goods which are produced by an individual firm or organization with the motive of earning profit are called private goods. Such goods are not offered free to the people. Such goods having the following characteristics:
Excludability: It means that people can be excluded from the consumption of the goods if they do not pay for the goods. For example, if a man does not pay for cinema ticket, he will not receive the ticket and cannot enter into cinema hall.
Rivalry:  It means that when the goods is purchased by an individual that leaves less of the goods available for others. For example, if a man purchases cell phone a lot, that cell phone is no longer available for others to purchase. 

Public goods:

Those goods which are provided without the motive of earning profit (with the motive of people’s welfare) to all the people either by the government or individual or organization are called Public goods. Such goods are offered free to the people. Such goods having the following characteristics: 

Non-excludability: It refers to any goods and services that is impossible to provide without it being available for many people to enjoy. For example, law and order.

Non-rivalry: It refers to any goods and services that does not reduce in availability as people consume it. For example, does not reduce street light for others.

Chapter 1 Part 8