Question

Purchase of a cycle by a household is treated as:(a) Capital formation(b) Production by household(c) Consumption(d) Production for self consumption

Answer 1

Answer:

c

Explanation:

this should be clear to you if you are a economics student

Answer 2

Answer:

Purchase of a cycle by a household is treated as Consumption.

Explanation:

• The activity of consumption comprises of the use of products and services to satisfy individual or collective human requirements or needs directly.  
• In order to fulfill their wishes, families buy a wide range of products and services such as cycles, furnishings, television, car, fridge, food grains, milk, oil, soap, etc.
• There is no time difference between goods being produced and consumed.
• They are consumed when manufactured, such as doctors services, attorneys, educators, etc.