Which of the following expenditure are Intermediate or Final goods

Q.4 Which of the following expenditure incurred are on intermediate products and which are on final products? You must state reason for your answer:

1. Purchase of tickets for train journey by an individual
2. Purchase of eatables by a firm
3. Purchase of a car by an employer for office use by his employees.

Solution:-

1. FINAL PRODUCT. It is a final consumer good as it is purchased by the individual to satisfy his wants.
2. INTERMEDIATE PRODUCT. It is an intermediate good as it will be used for further production of a product.
3. FINAL PRODUCT. It is a final producer good (capital good) as it is used to provide services to the employees which in a way help in further production.

Related Questions – Sandeep Garg Macroeconomics Class 12 Solutions Basic Concepts of Macroeconomics

• Distinguish between Factor income and Transfer income.
• Distinguish between Final goods and Intermediate goods.
• Machine purchased is always a final good.” Do you agree?
• Which of the following expenditure are Intermediate or Final goods?
• Discuss the meaning of Consumption goods and Capital goods.
• Distinguish between Consumer goods and Capital goods.