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SubjectsEconomics
उपभोग वस्तुएँ, पूँजीगत वस्तुएँ, अंतिम वस्तुएँ और मध्यवर्ती वस्तुएँ
In Class 12 Economics, this topic from “National Income and Related Aggregates” explains how goods are classified according to their use and stage of production. Students learn to distinguish consumption goods from capital goods, and final goods from intermediate goods, using clear examples such as food bought by households, machinery used by firms, and raw materials used in production. The topic also shows why this distinction matters in national income accounting and how it helps prevent double counting while measuring an economy’s output.
Correct answer: C. When a household buys them for its own use
Explanation: A household buying a phone for personal use acquires it for final consumption, not for resale or incorporation into another product. Therefore it is a final consumption good. Purchases by retailers, wholesalers or telecom companies for resale remain intermediate transactions for those buyers.
Correct answer: B. Intermediate good
Explanation: The farmer buys seeds as an input for producing crops. They are used in the production process and contribute to the output obtained in the same agricultural cycle. Therefore, seeds are intermediate goods for the farmer, not capital goods or goods purchased for direct personal consumption.
Correct answer: B. They raise productive capacity and serve for many periods
Explanation: Capital goods are durable means of production, such as machinery, equipment and business vehicles. They help produce goods or services over several accounting periods and increase productive capacity. They are generally final goods, although they are not final consumption goods.
Correct answer: A. Final capital goods
Explanation: The office uses computers as durable equipment to provide services and perform productive work over several periods. They are not transformed into another output and are not purchased for resale. Therefore, from the office’s viewpoint, they are final capital goods.
Correct answer: A. Final consumption good
Explanation: The laptop is purchased by a household member for personal study and direct satisfaction, not by a business as productive equipment or for resale. In the stated situation it is therefore a final consumption good. Classification depends on purpose and user.
Correct answer: B. Intermediate good
Explanation: The publisher uses paper as a material input to produce books. Paper is consumed or incorporated during production, and its value is transferred into the value of the printed books. Hence it is an intermediate good for the publisher, unlike a printing machine used repeatedly.
Correct answer: B. Final consumption good
Explanation: The student buys the book for personal study and examination preparation. It directly satisfies the student’s educational or personal need and is not used by a business to produce another marketed good or service. Therefore, it is a final consumption good for the student.
Correct answer: A. Final consumption good
Explanation: Milk bought by a household for drinking directly satisfies a consumption need in its present form. It is not used to produce another marketed product, does not provide long-term productive services, and is not an inventory investment. Therefore, national-income accounting treats it as a final consumption good.
Correct answer: B. Intermediate goods
Explanation: The manufacturer purchases tyres as components for producing new cars. The tyres are used up or incorporated during production, and their value is included in the value of the completed cars. Thus, they are intermediate goods for the manufacturer. The finished cars, not the separate tyres, are the final products in this situation.
Correct answer: B. Intermediate good
Explanation: The steel factory purchases iron ore as a raw material and processes it into steel. Because the ore is used up or transformed during production and its value contributes to the value of steel, it is an intermediate good for the factory, not a final or capital good.
Correct answer: A. Intermediate good
Explanation: The power plant burns coal as an input to generate electricity. Coal is used up during production and is not itself the durable equipment that repeatedly provides productive services. Therefore, in this context, coal is an intermediate good. The generator or turbine, in contrast, would be a capital good.
Correct answer: B. Intermediate goods
Explanation: The restaurant does not buy the vegetables for direct household-like consumption. It uses them as ingredients to prepare meals that are sold to customers. Therefore the vegetables are intermediate goods for the restaurant. If a household bought the same vegetables to eat directly, they would be final consumption goods; use determines classification.
Correct answer: A. Intermediate goods
Explanation: The chemicals are purchased by a soap manufacturer as raw materials or production inputs. They are transformed and incorporated into soap during the production process rather than being used directly by final consumers. Therefore, they are intermediate goods. Machinery used repeatedly to manufacture soap would be a capital good instead.
Correct answer: B. Final consumption good
Explanation: A household purchases soap to satisfy personal hygiene and cleaning needs. It is not used as an input to produce another marketable good and is not bought for resale. Therefore, it is a final consumption good. The same chemical substances bought by a soap factory would be intermediate goods because the purpose and user would be different.
Correct answer: B. Intermediate good
Explanation: The tailor uses thread as an input while producing stitching services for customers. The thread is incorporated into the garment or consumed during the service and is not purchased for the tailor's direct personal consumption. Hence it is an intermediate good. The sewing machine, used repeatedly over time, is the capital good.
Correct answer: A. Final capital good
Explanation: A sewing machine is a durable productive asset used by the tailor repeatedly to provide stitching services over several years. It is not used up in producing one garment and is not purchased for direct household consumption or resale. Therefore it is both a capital good and a final good in national income accounting.
Correct answer: A. Intermediate good
Explanation: The school kitchen buys rice as an input for preparing meals. The rice is processed and becomes part of the cooked food before it reaches the students, so it is not the final product at the purchase stage. Therefore it is an intermediate good for the kitchen. The prepared meal is the final consumption output.
Correct answer: C. Capital good
Explanation: The camera is purchased by a producer, the photographer, and is used repeatedly to provide photography services over a relatively long period. It is not used up as an input in producing one particular photograph. Therefore, it is a capital good because it is a durable productive asset that helps generate income and services.
Correct answer: C. Final consumption good
Explanation: The household buys the sweets for direct enjoyment and final use, not for resale or for using them as an input in another production process. Hence, the sweets are final consumption goods. Their value is included as household final consumption expenditure, subject to the usual national-income accounting treatment.
Correct answer: C. Intermediate good
Explanation: A good purchased for further processing is intended to become an input in producing another good or service. It has therefore not reached final use and is generally classified as an intermediate good. Its value should not be added separately to the value of the final product because that would create double counting.
Correct answer: B. Final capital good
Explanation: A producer-owned item that continues to provide productive services over several years is generally a capital good. It is not consumed completely during one production cycle like fuel or raw material. Since it is acquired for production and has lasting service potential, it is classified as a final capital good.
Correct answer: B. It is bought as an input in production or for resale
Explanation: An intermediate good is purchased for further production or for resale rather than for final satisfaction. It may be transformed into another product, used up while providing a service, or held by a trader before final sale. Its classification depends on the current purchaser’s economic purpose.
Correct answer: A. Final consumption good
Explanation: A good purchased by a consumer for direct use provides immediate or personal satisfaction and is not used to produce another commodity. It is therefore a final consumption good. The decisive factor is the purpose and use of the purchaser, not merely the physical nature or brand of the item.
Correct answer: B. Intermediate good
Explanation: A good that is completely used up or transformed during another production process is generally an intermediate good. Examples include flour used by a bakery and steel used in construction. A capital good, in contrast, remains available for repeated use over several production cycles, such as a machine or crane.
Correct answer: B. Capital good
Explanation: A crane is durable equipment that helps a construction firm provide services over many production periods. It is not consumed or incorporated into one building as a material. Since it is purchased for the firm’s own productive use rather than for resale, it is a capital good and, in national-income classification, a final capital good.
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