Which among the following are final goods and which are intermediate g

1.	Which among the following are final goods and which are intermediate goods ? Give reasons. (a) Milk purchased by a tea stall. (b) Bus purchased by a school. (c) Juice purchased by a student from the school canteen.
Answer» (a) Milk purchased by a tea stall is an intermediate good because milk will be used up by the tea stall in the process of production i.e., for preparing tea meant for sale. It remains within production boundary. (b) Bus purchased by a school is a final good because a bus is a durable product and shall be available for use in future also. A bus crosses over production boundary and does not remain in production boundary. (c) Juice purchased by a student from the school canteen is a final good because it is used for consumption by a consumer. It is not found in production boundary.

Which among the following are final goods and which are intermediate goods ? Give reasons. (a) Milk purchased by a tea stall. (b) Bus purchased by a school. (c) Juice purchased by a student from the school canteen.

Answer»

(a) Milk purchased by a tea stall is an intermediate good because milk will be used up by the tea stall in the process of production i.e., for preparing tea meant for sale. It remains within production boundary.

(b) Bus purchased by a school is a final good because a bus is a durable product and shall be available for use in future also. A bus crosses over production boundary and does not remain in production boundary.

(c) Juice purchased by a student from the school canteen is a final good because it is used for consumption by a consumer. It is not found in production boundary.

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