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Consider the following statements about the capital goods.
1. They are final goods which are to be ultimately consumed
2. They continue to enable the production process to go on for Continuous cycles of production
3. These also includes services which are consumed by the ultimate consumer
Which of these statements are correct?
- a)1 Only
- b)2 Only
- c)3 Only
- d)All of them
Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements about the capital goods.1. They are...
- Of the final goods, we can distinguish between consumption goods and capital goods. Goods like food and clothing, and services like recreation that are consumed when purchased by their ultimate consumers are called consumption goods or consumer goods.
- Then there are other goods that are of durable character which are used in the production process. These are tools, implements and machines. While they make production of other commodities feasible, they themselves don’t get transformed in the production process.
- They are also final goods yet they are not final goods to be ultimately consumed. Unlike the final goods that we have considered above, they are the crucial backbone of any production process, in aiding and enabling the production to take place.
- These goods form a part of capital, one of the crucial factors of production in which a productive enterprise has invested, and they continue to enable the production process to go on for continuous cycles of production.
Most Upvoted Answer
Consider the following statements about the capital goods.1. They are...
Introduction:
Capital goods are durable goods that are used in the production of other goods and services. They are not meant for final consumption but rather for facilitating the production process. In this context, let's analyze the given statements about capital goods.
Analysis of the statements:
1. They are final goods which are to be ultimately consumed:
This statement is incorrect. Capital goods are not meant for final consumption but rather for facilitating the production process. They are used to produce other goods and services, and are not directly consumed by the end consumer. Therefore, statement 1 is incorrect.
2. They continue to enable the production process to go on for continuous cycles of production:
This statement is correct. Capital goods are used repeatedly in the production process. They aid in the creation of other goods and services and are not consumed or depleted in a single cycle of production. For example, machinery, tools, equipment, etc., are used in multiple production cycles. Therefore, statement 2 is correct.
3. These also include services which are consumed by the ultimate consumer:
This statement is incorrect. Capital goods refer to physical goods that are used in the production process. They do not include services that are consumed by the ultimate consumer. Services like transportation, healthcare, education, etc., are not considered capital goods. Therefore, statement 3 is incorrect.
Conclusion:
Based on the analysis, we can conclude that statement 2 is the only correct statement. Capital goods are not final goods meant for ultimate consumption. Instead, they are durable goods that enable the production process to continue for multiple cycles. They do not include services consumed by the ultimate consumer.
Capital goods are durable goods that are used in the production of other goods and services. They are not meant for final consumption but rather for facilitating the production process. In this context, let's analyze the given statements about capital goods.
Analysis of the statements:
1. They are final goods which are to be ultimately consumed:
This statement is incorrect. Capital goods are not meant for final consumption but rather for facilitating the production process. They are used to produce other goods and services, and are not directly consumed by the end consumer. Therefore, statement 1 is incorrect.
2. They continue to enable the production process to go on for continuous cycles of production:
This statement is correct. Capital goods are used repeatedly in the production process. They aid in the creation of other goods and services and are not consumed or depleted in a single cycle of production. For example, machinery, tools, equipment, etc., are used in multiple production cycles. Therefore, statement 2 is correct.
3. These also include services which are consumed by the ultimate consumer:
This statement is incorrect. Capital goods refer to physical goods that are used in the production process. They do not include services that are consumed by the ultimate consumer. Services like transportation, healthcare, education, etc., are not considered capital goods. Therefore, statement 3 is incorrect.
Conclusion:
Based on the analysis, we can conclude that statement 2 is the only correct statement. Capital goods are not final goods meant for ultimate consumption. Instead, they are durable goods that enable the production process to continue for multiple cycles. They do not include services consumed by the ultimate consumer.
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Consider the following statements about the capital goods.1. They are final goods which are to be ultimately consumed2. They continue to enable the production process to go on for Continuous cycles of production3. These also includes services which are consumed by the ultimate consumerWhich of these statements are correct?a) 1 Onlyb) 2 Onlyc) 3 Onlyd) All of themCorrect answer is option 'B'. Can you explain this answer?
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