Final answer:
The correct answer is option 1. The fundamental difference between goods and services is that goods are tangible products, while services are intangible actions performed for another person. Goods can be durable or non-durable, and services are differentiated by aspects such as quality and brand reputation.
Step-by-step explanation:
The most basic and universally cited difference between goods and services is that goods are tangible products that can be seen, touched, and physically exchanged, whereas services are intangible actions or tasks performed for someone else. In the economic sense, goods are items that could be durable, non-durable, consumer goods, capital goods, or even public goods, depending on their nature and consumption. For instance, durable goods like televisions and refrigerators last for an extended period, while non-durable goods such as food products and gasoline have a shorter consumption lifespan.
On the other hand, services, despite being intangible, are crucial economic products for which people pay. Examples include haircuts, insurance, dental visits, and banking services. Although they can't be physically held or owned as goods can, services are essential in fulfilling people's needs and wants. Furthermore, services can be differentiated by intangible aspects like quality, guarantees, and brand reputation, often influenced by advertising and personal preference.
Thus, in response to the student's question regarding the difference between goods and services, the correct option is: 1) Goods are tangible products that can be seen and touched, while services are intangible actions or tasks performed for someone else.