Question

Distinguish between:
Consumption good and capital good.

Answer 1

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: Ice cream and milk used by households	Example: Plant and machinery