Basic Concepts in Economics — Economics STD 11 Commerce / Arts — Question

In economics, wealth is anything that has market value and which commands a price.
Wealth is a commodity that can be exchanged for money.
A commodity must possess the following features to be considered wealth.

• Utility
• Scarcity
• Transferability
• Externality

(i) Utility: Utility means the capacity of a commodity to satisfy a human want. A commodity must have to want satisfying power. E.g. books, calculators, etc. have utility. So they are regarded as wealthy.(ii) Scarcity: A commodity is called wealth, if it is scarce in supply then its demand. All economic goods are considered as wealth because the price is paid for them due to scarcity.(iii) Transferability: A commodity is called wealth if it can be transferred from one person to another. It includes material or tangible goods. E.g. furniture, car, etc.(iv) Externality: A commodity is regarded as wealth only if it has externality i.e. it must be external to the human body. E.g. computer.
(In the case of transferability, Physical transferability means the actual transfer of goods from one person to another. Whereas, notional transferability refers to the transfer of ownership rights. E.g. land, building, etc.) Internal qualities of human beings like voice, beauty, etc. are neither external nor transferable. So they are not wealthy in an economic sense.