Question

11. Giving reasons, classify the following into intermediate goods and final goods.
a) A machine purchased for installation in a factory,
b) Fees paid to lawyer by a producer.​

Answer 1

Answer:

Explanation:

A) a machine purchased by a factory is a final good because it is an investment, it led to capital formation

B) fees paid to a lawyer by a producer is an intermediate good because the producer uses the servives of the lawyer to be used in the production process during that year.

However if the service is used by a household it will be a final good.