Question

A car purchased by a household is a ……………

(a) single use capital good.

(b) single use consumer good.

(c) durable consumer good.

(d) semi-durable consumer good.​

Answer 1

Answer:

A car purchased by a household is a final good because the household is the final user of the car and no value is to be added to the car.

Answer 2

A car purchased by a household is a (c) durable consumer good.

Definition of durable consumer goods:

"Durable consumer goods are are a category of consumer goods that do not wear out quickly, and therefore do not have to be purchased frequently."

Durable consumer goods:

• Their name literally means lasting for a considerable period of time and the opposite of durable is ,non-durable goods ( bread, milk, etc.)
• They are classified under the category of durable since they last for atleast 3 years. They are included in the core retail sales data. Durable goods can retain their economic value for a longer period of time.
• The consumption rate of these durable goods are used in the calculation of strength of economy by the economists. An individual preserve their wealth by spending on durable goods.

Examples of durable goods includes home appliances, scooters, cars, lawn and garden equipment.