Question

A farmer sells wheat to a flour mill. The mill grinds the wheat and sells the flour to a biscuit company. The biscuit company uses the flour and things such
as sugar and oil to make four packets of biscuits and sold them. Find out the intermediate goods involved
1) Wheat
2)Wheat, Sugar
3)Wheat, Sugar, oil
4) biscuit
​

Answer 1

1) Wheat

Explanation:

• Intermediate goods,  are commodities used as components in the manufacture of other commodities or final products , for example partly finished goods. A business can manufacture and use intermediate products, or manufacture and then sell or purchase.
• Intermediate products are either part of the finished product during the manufacturing process or are modified upon identification. This implies that intermediate items are sold between industry sectors.
• The intermediate products are not included in the GDP of a country because this is a double count as only the finished commodity is included &  the "value of the final good" includes the "value of the intermediate good".

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What are intermediate goods? give one example of intermediate ...

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Answer 2

Answer:

3) Wheat, Sugar, Oil

Explanation:

Wheat, Sugar and Oil are the intermediate goods in this situation as they are further being used in the producti of the final good i.e. Biscuits.

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