Given below are some statements. Read them carefully and choose the correct statement (s) from the given options.

Statement 1: The durable goods such as tools, implements and machines which are used in the production process are also called as final goods.

Statement 2: The goods such as tools, implements and machines are not final goods to be ultimately consumed.

Both statements are correct.

The correct answer is option 3: Both statements are correct.

Statement 1: The durable goods such as tools, implements and machines which are used in the production process are also called as final goods. This is correct.

Explanation as per NCERT : 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. These goods form a part of capital, one of the crucial factors of production in which a productive enterprise has invested, and they continue to enable the production process to go on for continuous cycles of production. These are capital goods and they gradually undergo wear and tear, and thus are repaired or gradually replaced over time. Thus, if we consider all the final goods and services produced in an economy in a given period of time they are either in the form of consumption goods (both durable and non-durable) or capital goods. As final goods they do not undergo any further transformation in the economic process.

Statement 2: The goods such as tools, implements and machines are not final goods to be ultimately consumed.This is also correct. Tools, implements, and machines are not considered final goods to be ultimately consumed because they are not intended for direct consumption or use by the end consumer. Instead, they are used by producers in the production process to create other goods and services.