Free good

A good that is made available at zero price is not necessarily a free good. For example, a shop might give away its stock in its promotion, but producing these goods would still have required the use of scarce resources, so this would not be a free good in an economic sense.

There are three main types of free goods:

• Resources that are so abundant in nature that there is enough for everyone to have as much as they want. An example of this is the air that we breathe.

• Resources that are jointly produced. Here the free good is produced as a byproduct of something more valuable. Waste products from factories and homes, such as discarded packaging, are often free goods.

• Ideas and works that are reproducible at zero cost, or almost zero cost. For example, if someone invents a new device, many people could copy this invention, with no danger of this "resource" running out. Other examples include computer programs and web pages.

Intellectual property laws have the effect of converting these goods to scarce goods by law. Although these goods are free goods (in the economic sense) once they have been produced, they do require scarce resources, such as skilled manpower, to create them in the first place. Thus intellectual property laws such as copyrights and patents are sometimes used to give exclusive rights to the creators of such "intellectual property" in order to encourage resources to be approprately allocated to these activities.