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Some Basic Concepts

The document outlines basic economic concepts related to goods, categorizing them into consumption goods, capital goods, final goods, and intermediate goods. Consumption goods satisfy human wants directly and include perishable and durable items, while capital goods are used to produce consumer goods and include tools and machinery. Final goods are ready for consumption and not used for further production, whereas intermediate goods are used for resale or further production.

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74 views2 pages

Some Basic Concepts

The document outlines basic economic concepts related to goods, categorizing them into consumption goods, capital goods, final goods, and intermediate goods. Consumption goods satisfy human wants directly and include perishable and durable items, while capital goods are used to produce consumer goods and include tools and machinery. Final goods are ready for consumption and not used for further production, whereas intermediate goods are used for resale or further production.

Uploaded by

pooja
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Some Basic Concepts

A) Concepts of Goods

1) What are consumption of goods? (consumer goods) Give examples.

Ans- i) The goods which can satisfy human wants directly are called consumption
goods (consumer goods).
ii) Consumption goods may be either purchase goods or durable goods.
iii) The perishable goods such as milk, fruits, vegetables, fish, bread etc are consumer
goods.
iv) The durable goods such as furniture, mobile, phone, shoes, sugar, radio, T.V etc are
also consumer goods.

2) What are Capital goods? Give examples.


Ans- i) The goods which satisfy human wants indirectly are called capital goods. They
are also called production goods or investment goods.
ii) Capital goods are used to produce consumer goods.
iii) Capital goods are durable goods.
iv) Seeds, fuels, machines, plants, tools, factory, building, raw materials etc are
examples of capital goods.

3) What are final (finished) goods? Give examples.


Ans- i) Final goods (finished goods) are those goods which are ready for consumption
or investment.
ii) These goods are ready for their final users.
iii) These goods are not used for further production.
iv) These goods are the output of the production process.
v) The value of only these goods are included in the national income.
vi) A shirt or pant, furniture, a sewing machine, a mobile phone, a house, a book etc are
are examples of final or finished goods.

4) Explain the concepts of intermediate goods (unfinished goods)


Ans- The goods which are used either for resale or for further production are called
intermediate goods. For example milk is used in a dairy for resale and bamboo is used
in a papermill for production of paper are intermediate goods. Again thread is made
from cotton cloth is made from cotton cloth is made from thread and readymade
garments are made from cloth. Here cotton, thread and cloth are intermediate goods
and readymade garments are finish goods.
5) Distinguish between consumer goods and capital goods. Or
Show the difference between consumption goods and production goods.
Ans- The goods which satisfy human wants directly are called consumer goods. They
may be either perishable goods such as milk, fruits, vegetables, fish etc or durable
goods like rice, furniture, motor bike, mobile phone, book etc.
On the other hand, the goods which satisfy human wants indirectly are called
capital goods or production goods. Capital goods help to produce consumer goods.
Seeds, fuels, machines, factory building, tools and implements etc are capital goods.

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