Read the following statements - Assertion (A) and Reason (R):
Assertion: A good can be intermediary in one case and final good in another case.
Reasoning: A good can be used for final consumption or the same good can be used for further processing.
From the given alternatives choose the correct one:
Answer & explanation
Correct answer: option 1
The correct answer is option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Assertion: A good can be intermediary in one case and final good in another case. This is correct. A good can indeed be an intermediary good in one instance and a final good in another.
Reasoning: A good can be used for final consumption or the same good can be used for further processing. This is also correct.
The reason given accurately explains why a good can be classified differently depending on its use. A good can indeed be used for final consumption or for further processing, and this is why it can be considered either an intermediary good or a final good.
For example, sugar purchased by household is final good but the same sugar purchased by a bakery will be intermediary as it will be used for further processing, that is, making cakes and breads, etc.