Final answer:
Services are called intangible economic products when they do not include a tangible product, and they can often include excludable components and differentiation through intangible aspects such as brand reputation and advertising to add consumer value.
Step-by-step explanation:
When a tangible product is not included in a service, it is called an intangible economic product. Services such as haircuts, insurance, dentist visits, and banking are examples where the consumer pays for the benefit or value that is provided rather than a physical item. Unlike goods, which are physical and can be seen and touched, services are made up of intangible aspects, and because of this, they often include additional promises like satisfaction guarantees or free delivery to create product differentiation and add value.
Excludable goods and services are those not accessible to everyone openly; access is typically granted through purchase or by meeting certain requirements. Additionally, these intangible aspects, like reputation for quality or advertisements, can create strong preferences among consumers for certain brands, despite the actual similarities between the underlying products. This shows how intangible aspects can significantly shape consumer behavior and product perception in the market.