Distinguish between consumer goods and capital goods. Give examples.

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Solution

Consumption goods Capital goods
Consumption goods are those goods which are directly used for satisfaction of human wants. These are not used in the production of other goods.Consumption goods are meant for final consumption as final goods.
Capital goods are those goods which are used in the process of production for several years and are of higher value. These goods are fixed assets of the producers. Use of these goods leads to depreciation.
Example: Bread and butter consumed by the consumers.
Example: Plant and machinery.

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Consumption goods	Capital goods
Consumption goods are those goods which are directly used for satisfaction of human wants. These are not used in the production of other goods.Consumption goods are meant for final consumption as final goods.	Capital goods are those goods which are used in the process of production for several years and are of higher value. These goods are fixed assets of the producers. Use of these goods leads to depreciation.
Example: Bread and butter consumed by the consumers.	Example: Plant and machinery.