Which statement best describes the difference between goods and services?

• A. Goods are tangible; services are intangible.
• B. Services are intangible; goods are tangible.
• C. Goods are always heavier than services.
• D. Services are physical goods.

Answer: (A)

The main idea is that goods and services differ by tangibility. Goods are physical items you can touch, own, and keep in stock; they have a tangible form. Services are actions or performances you experience, but you don’t take away a physical object representing the service. So describing goods as tangible and services as intangible captures the essential difference. For example, a car is a good (you can hold and own it), while a haircut is a service (you receive the result of the service but don’t obtain a tangible object that represents it). The other phrasing either flips the terms or adds factors (like weight) that aren’t what distinguishes goods from services.