Classify the folllowing goods into intermediate goods and final goods:

(i) Milk purchased by a household

(ii) Purchase of rice by a grocery shop

(iiii) Purchase of an air conditioner for use in a shop

(iv) Cloth used for making a sofa-set by the carpenter

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Solution

(i) Milk directly satisfies the wants of the households or the consumer. It is a final good when purchased by a household.

(ii) Rice purchased by a grocery shop is an intermediate good because the rice is purchased for resale to final users.

(iii) An air-conditioner purchased by a shop is a final good because the air conditioner is investment expenditure; it adds to the capital stock of the shop.

(iv) Cloth used for making a sofa-set by the carpenter is an intermediate good as it is used as a raw material to produce a final good.

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Classify the folllowing goods into intermediate goods and final goods: (i) Milk purchased by a household (ii) Purchase of rice by a grocery shop (iiii) Purchase of an air conditioner for use in a shop (iv) Cloth used for making a sofa-set by the carpenter

Classify the folllowing goods into intermediate goods and final goods:

(i) Milk purchased by a household

(ii) Purchase of rice by a grocery shop

(iiii) Purchase of an air conditioner for use in a shop

(iv) Cloth used for making a sofa-set by the carpenter