Q. Which one among the following statements is incorrect regarding the term ‘Final goods’?
Q. Which one among the following statements is incorrect regarding the term ‘Final goods’?
The correct option is C
A consumption good cannot be a final good.
Explanation:
Option (a) is correct: It is not in the nature of the good but in the economic nature of its use that a good becomes a final good.
Option (b) is correct: Final goods undergo transformation by the action of the ultimate purchaser. In fact, many such final goods are transformed during their consumption. Thus, the tea leaves purchased by the consumer are not consumed in that form – they are used to make drinkable tea, which is consumed.
Option (c) is incorrect: Final goods can be distinguished between consumption goods and capital goods. 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.
Option (d) is correct: It is possible for a product to be both a final and a capital good. The categorization depends on the product's use. For example, a pickup truck can be either a capital good or a final good. If used by a builder to transport material to construct homes, the truck is a capital good. When the truck is the household vehicle, it is a final good.
A consumption good cannot be a final good.
Explanation:
Option (a) is correct: It is not in the nature of the good but in the economic nature of its use that a good becomes a final good.
Option (b) is correct: Final goods undergo transformation by the action of the ultimate purchaser. In fact, many such final goods are transformed during their consumption. Thus, the tea leaves purchased by the consumer are not consumed in that form – they are used to make drinkable tea, which is consumed.
Option (c) is incorrect: Final goods can be distinguished between consumption goods and capital goods. 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.
Option (d) is correct: It is possible for a product to be both a final and a capital good. The categorization depends on the product's use. For example, a pickup truck can be either a capital good or a final good. If used by a builder to transport material to construct homes, the truck is a capital good. When the truck is the household vehicle, it is a final good.
