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Question
Q. Which one of the following is not a ‘Capital good’?
Q. Which one of the following is not a ‘Capital good’?
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Solution
The correct option is B
Motor vehicle
Explanation: Capital goods are tools, implements and machines used to make production of other commodities (Consumer goods) feasible, they themselves don’t get transformed in the production process. Capital goods are of durable nature. Some commodities like television sets, automobiles or home computers, although they are for ultimate consumption, have one characteristic in common with capital goods – they are also durable. That is why these goods are called consumer durable goods.
A machine used to produce a Motor vehicle is a capital good whereas a motor vehicle itself is a consumer durable good.
Motor vehicle
Explanation: Capital goods are tools, implements and machines used to make production of other commodities (Consumer goods) feasible, they themselves don’t get transformed in the production process. Capital goods are of durable nature. Some commodities like television sets, automobiles or home computers, although they are for ultimate consumption, have one characteristic in common with capital goods – they are also durable. That is why these goods are called consumer durable goods.
A machine used to produce a Motor vehicle is a capital good whereas a motor vehicle itself is a consumer durable good.
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