What is the way economics distinguishes between items that people buy to use/keep, and people just buy to sell at a higher price to other sellers? I see both referred to as “commodities”, and both have “intrinsic value” (People will pay for them), but they seem clearly different to me.

Question

What is the way economics distinguishes between items that people buy to use/keep, and people just buy to sell at a higher price to other sellers? I see both referred to as “commodities”, and both have “intrinsic value” (People will pay for them), but they seem clearly different to me.

In: 39

Answer 1

There is no difference and economics does not distinguish between them.

Commodities are uniform goods that are interchangeable with each other. A good example is Oil, where one barrel is just as good as any other,

Intrinsic value is a complicated thing to understand, and in general there is no such thing. That being said certain specific subjects in economics and finance do have a more limited definition of “intrinsic value” that does exist. For example, a bank account has an intrinsic value equal to its balance (even though that balance itself may have no intrinsic value).