Question

Explain consumer goods and capital goods?​

Answer 1

Answer:

Capital goods and consumer goods are terms used to describe goods based on how they are used. A capital good is any good used to help increase future production. Consumer goods are those used by consumers and have no future productive use. ... An apple bought at a grocery store and immediately eaten is a consumer good

Answer 2

Capital Goods

• Capital goods are any tangible asset used by one business to produce goods or services that then become an input for other businesses to produce consumer goods. They are also known as intermediate goods, durable goods or economic capital. The most common capital goods are property, plant, and equipment (PPE), or fixed assets such as buildings, machinery and equipment, tools and vehicles.

• Capital goods are different from financial capital, which refers to the funds companies use to grow their businesses. Natural resources not modified by human hands are not considered capital goods, although both are factors of production.

• Businesses do not sell capital goods. That means capital goods do not directly create revenue like consumer goods. To financially survive the accumulation of capital goods, businesses rely on savings, investments or loans.

• Economists and businesses pay special attention to capital goods because of the role they play in improving the productive capacity of a company or country. In other words, capital goods make it possible for companies to produce at a higher level of efficiency. For example, consider two workers digging ditches. The first worker has a spoon and the second worker has a tractor equipped with a hydraulic shovel. The second worker can dig much faster because they have the superior capital good.

Consumer Goods

• A consumer good is any good purchased for consumption and not used later for the production of another consumer good. Consumer goods are sometimes called final goods because they end up in the hands of the consumer or the end-user. When economists and statisticians calculate gross domestic product (GDP), they do so based on consumer goods.

• Examples of consumer goods include food, clothing, vehicles, electronics and appliances. Consumer goods fall into three different categories: durable goods, nondurable goods and services. Durable goods have a lifespan of more than three years and include motor vehicles, appliances and furniture. Non-durable goods are meant for immediate consumption and have a lifespan of fewer than three years. This includes items such as food, clothing and gasoline. Consumer services are not tangible and cannot be seen, but can still give consumers satisfaction. Haircuts, oil changes and car repairs are examples of services.

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