Question

Indicate whether each of the following is a final good, an intermediate good, or neither.

1. Coffee beans purchased by coffee shop
2. One share of google stock
3. a new pick-up truck purchased by a consumer
4. a new home purchased by a family

Answer 1

1. Coffee beans purchased by coffee shop==> Intermediate good

2. One share of google stock ==>Not a good

3. a new pick-up truck purchased by a consumer==> Final good

4. a new home purchased by a family ==> Final good.

Explanation :

In business goods can be classified according to their form, that is goods are grouped according to readiness/completion.

Raw unfinished goods are goods that have not undergone production process and would need to be worked on before they are consumed.

Intermediate goods are goods that have passed through some production steps but are not completely ready for consumption. They still need to pass a few more steps of Production to be useful to the consumer.

Finally, Finished goods or product have undergone the required production stages and are fit for immediate consumption by end user.