describe consumption giving its types and significance
Answers
Answer:
Meaning of Consumption:
The department of Economics which deals with wants and their satisfaction is known as Consumption.
Types of Consumption:
Consumption is known as direct or final consumption, when the goods satisfy human wants directly and immediately. The goods have reached their final destination, e.g., wearing a shirt or eating a mango or using furniture, in which case the act of consumption is not a single process but is of a continuing nature.
On the other hand, consumption is called indirect or productive consumption when the goods are not meant for final consumption but for producing other goods which will satisfy human wants directly, e.g., using a sewing machine for making clothes.
The use of the instruments of production is a case of indirect or productive consumption. Consumption may be useful or wasteful. When there is destruction by fire or earthquake or by any other natural calamity, the goods are just destroyed and not usefully consumed.
For practical purposes, consumption means the spending of money income. ... Consumption, thus, involves expenditure of income or wealth-using activity of man. Types of Consumption: Consumption is known as direct or final consumption, when the goods satisfy human wants directly and immediately.