Economics is the study of how people interact through the exchange of goods and services. There are many types of goods and services that respond differently to economic principles like supply and demand. Some key types are: 1) Normal goods which increase in demand as income increases, like clothing. 2) Public goods which are non-rival and non-excludable, like national defense. 3) Necessity goods which people require to survive, like food and water. 4) Private goods which people must pay for if they want to use them, like televisions. 5) Merit goods which provide benefits but people may underestimate, like education.