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Question
Describe the basic characteristics of wealth.
Very Long Answer
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Solution
The basic characteristics of wealth are:
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Utility: Wealth must have the power to satisfy human wants. Without utility, a commodity cannot be considered wealth.
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Scarcity: Wealth must be scarce relative to demand. If a good is abundantly available without effort or cost e.g., air, sunshine, it is not wealth.
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Transferability: Wealth must be capable of being transferred from one person to another. For example, a degree or personal abilities, although useful, cannot be transferred and hence are not wealth.
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Externality: Wealth must have an external shape or form, i.e., it must be something external to a person that can be owned or possessed.
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