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Difference Between Final Goods And Intermediate Goods

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Published in: Economics | Education | Educational
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Here we present a PPT on difference between final goods and intermediate goods

Adarsh P / Lucknow

6 years of teaching experience

Qualification: M.Com ( App. Economics )

Teaches: CA Foundation, Business Economics, Business Studies, Economics, Statistics

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  1. N/A
  2. Eco rners Concept and Types of Goods Goods produced in an economy are generally classified as final goods and intermediate goods. Final Goods Goods which have crossed the boundary line of production and are readily available for use by their final users are termed as final goods. Consumers and producers are the two types of final goods.
  3. Eco rners Intermediate Goods Goods which are within the boundary line of production, the value is yet to be added to these goods and are not available for use by their final users are called intermediate goods. These goods are consumed by another firm and used as intermediate goods in the production process or for further sale. For example, papers purchased by newspaper agency for printing news are intermediate goods. Expenditure on intermediate goods by the producers during an accounting year is called intermediate consumption
  4. Eco rners Differences between Intermediate Goods and Final Goods
  5. Internnediate Goods Vs. Final Goods Inter•nediate goods • Used for production of other goods and services • Meant for resale so value gets added to these goods • Remain within the production boundary • Value not included in the National Income • Eg: Milk used in sweet shop for resale • Cotton varn used by textile industrv Final goods Used for final consumption Meant for final use so no value addition is made Remain outside the production boundary Value included in national income • Milk bought by. household fo consumption
  6. Eco rners Consumer Goods or Consumption Goods Final consumer goods are purchased by the consumer for the satisfaction of their wants. They are the final users of food stuffs, dress material and other accessories. Final users of consumption goods are consumer households, general government or government welfare agency and non-governmental organisations
  7. Classi ecation o Durable consumer goods Eco rners Consum tion Goods Non Durable consumer goods Semi-Durable consumer goods Sevices
  8. Eco rners Durable consumer goods Durable consumer goods are those goods which can be used for several years and are of relatively high value. Examples- Television, Washing Machine and Air Conditioner.
  9. Eco rners Semi-Durable Consumer Goods Semi-durable consumer goods are those goods which can be used for a period of one year or slightly more. Examples - Clothes, Furniture and Crockery.
  10. Eco rners Non-durable or single use consumer goods Non-durable or single use consumer goods are those goods which are used in a single act of consumption. Examples -Bread, Ink, Petrol and Milk.
  11. Eco rners Services Services are those non-material goods which directly satisfy human wants. Examples - Doctor, Lawyer and Domestic Servants
  12. Eco rners Producer Goods or Capital Goods Final producer goods are purchased by the producers in the production process for several years and are of high value. These goods are fixed assets of the producers such as land, building and machineries.
  13. Consunnption goods vs. capital goods • • • • • Consun•ption goods Bought by consumers to satisfy their needs and wants Durable goods — car, TV, radio etc., Non-durable goods — oil, milk, vegetable etc., Semi durable goods — crockery etc., Services — bank, doctor, teacher etc., Capital goods Which form the capital stock of the country and which is used in the production process Durable goods — car used by a company for business purpose Stock of raw material, semi finished and finished goods at the end of the financial year which satisfy human wants indirectly
  14. Eco rners All capital qoods are producer qoods but all producer qoods are not capital qoods Producer goods includes goods used as raw material such as papers for print media to print newspapers, journal, books and magazines and also goods used as fixed assets such as land, building and machinery. Capital goods include only the fixed assets of producers. These goods are used as durable use producer goods, whereas the goods used as raw material are single use producer goods. These goods cannot be used again in the production process. Therefore, all capital goods are producer goods but all producer goods are not capital goods

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