) What do you mean by producer goods? Give
examples.
Answers
Answer:
Producer goods, also called intermediate goods, in economics, goods manufactured and used in further manufacturing, processing, or resale. Producer goods either become part of the final product or lose their distinct identity in the manufacturing stream.
Producer goods, also called intermediate goods, in economics, goods manufactured and used in further manufacturing, processing, or resale. Producer goods either become part of the final product or lose their distinct identity in the manufacturing stream. The prices of producer goods are not included in the summation of a country’s gross national product (GNP), because their inclusion would involve double counting of costs and lead to an exaggerated estimate of GNP. Only the price of final consumer goods is included in the GNP. The contribution of producer goods to the GNP may be determined through the value-added method. This method calculates the amount of value added to the final consumer good by each stage of the production process. When the values added at all stages of production have been established, they are summed to estimate the total value of the final product.
Examples of Producer Goods:
Sugar – sugar is used as a final good (when it is sold as sugar in the supermarket) or as an input (when it is used as an ingredient in other food products
Steel – a raw material used in the production of many other goods, such as bicycles.
Car engines - Some firms make and use their own, others buy them from other producers as an intermediate good, then use them in their own car.
Paint, plywood, pipe and tube, and ancillary parts.
Wood - wood is used in multiple purposes for construction of building or production of furniture
glass - glass can be used to make dishes, cups, bottles or windows
salt - salt is used in almost all food production
silver and gold - silver and gold can be used for production of jewerly or kitchen utensils and even for food decoration or interior design