Which of the following are intermediate goods?
(A) Milk purchased by a household
(B) Sugar purchased by a restaurant
(C) Furniture purchased by school
(D) Chalk and duster purchased by school
(E) Printer purchased by a lawyer
Choose the correct answer from the options given below.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (B), (D) only
Intermediate goods are used as raw material or inputs in producing something else. Goods bought for final use, and capital goods that last for many years, are final goods.
(A) Milk purchased by a household — Final good. The household consumes it and sells nothing made from it.
(B) Sugar purchased by a restaurant — Intermediate good. It is an input for the food that the restaurant sells.
(C) Furniture purchased by school — Final good. It is a capital good that serves the school for many years.
(D) Chalk and duster purchased by school — Intermediate good. They are used up within a short time while the school provides its service.
(E) Printer purchased by a lawyer — Final good. It is a capital good that the lawyer uses for many years.
NCERT (2026-27): “2.1 Some Basic Concepts of Macroeconomics … 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. Similarly most of the items that enter our kitchen are transformed through the process of cooking. But cooking at home is not an economic activity, even though the product involved undergoes transformation. Home cooked food is not sold to the market. However, if the same cooking or tea brewing was done in a restaurant where the cooked product would be sold to customers, then the same items, such as tea leaves, would cease to be final goods and would be counted as inputs to which economic value addition can take place. Thus it is not in the nature of the good but in the economic nature of its use that a good becomes a final good.… …Then there are other goods that are of durable character which are used in the production process. These are tools, implements and machines. While they make production of other commodities feasible, they themselves don’t get transformed in the production process. They are also final goods yet they are not final goods to be ultimately consumed.… …Of the total production taking place in the economy a large number of products don’t end up in final consumption and are not capital goods either. Such goods may be used by other producers as material inputs. Examples are steel sheets used for making automobiles and copper used for making utensils. These are intermediate goods, mostly used as raw material or inputs for production of other commodities. These are not final goods.…” |