Goods like food and clothing, and services like recreation that are consumed when purchased by their ultimate consumers are called consumption goods or consumer goods. This also includes services which are consumed but for convenience we may refer to them are as consumer goods.
There are other goods that are of durable character which are used in the production process. These are tools, implements and machines. While they make production of other commodities feasible, they themselves don't get transformed in the production process. They are also final goods yet they are not final goods to be ultimately consumed. They are the crucial backbone of any production process, in aiding and enabling the production to take place. These goods form a part of capital, one of the crucial factors of production in which a productive enterprise has invested, and they continue to enable the production process to go on for continuous cycles of production. There are capital goods and they gradually undergo wear and tear and thus are repaired or gradually replaced over time. The stock of capital that an economy possesses is thus preserved, maintained and renewed partially or wholly over time.
Final goods consist of:
Consumer goods and Capital goods
**Final goods** are goods that are **ready for consumption or investment** and are not used as inputs in further production.
- **Consumer goods** are used directly by consumers (e.g., food, clothes).
- **Capital goods** are used by businesses to produce other goods (e.g., machinery, tools).
- **Intermediate goods (b and c) are incorrect** because they are used in further production and are not final goods.
Thus, the correct answer is **Consumer goods and Capital goods (d)**.
Important Questions from Producer’s Behaviour
The stock of unsold finished goods or semi-finished goods or raw materials, which a firm carries from one year to the next is called __________:
On the Eve of Independence, small-scale industry was one which invested a maximum amount of:
Investment that firms are planning to invest in an economy is known as:
______ are things a firm owns or what a firm can claim from others.
Which of the following is not a final good?
