1.

Distinguish between final goods and intermediate goods. Give an example of  each.

Answer»

Intermediate goods and final goods are distinguished on the basis of following points :

Basis of DifferenceFinal GoodsIntermediate Goods
UseFinal goods are those products that are ready for use by the final consumers.Intermediate goods are those products which are not ready for final use and are used only as raw materials for further production.
Further ProcessingSuch goods do not require any further processing.These goods require further processing and go through various stages of production.
ResaleThese goods are not meant for resaleSuch goods are resold for further production.
ExampleFor example, cotton purchased by a consumer for personal consumption is a final good.For example, cotton purchased by a textile industry for making cloth is an intermediate good. 


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