Chapter 10.3, Problem 5R

To determine

To state: The difference between consumer and capital goods.

Answer to Problem 5R

Consumer goods are the final goods whereas capital goods are the goods used to manufacture consumer goods.

Explanation of Solution

Consumer goods are the final goods that are bought by the customers for consumption. They are made with the help of capital goods. Example: clothes, food, vehicles, etc.

Capital goods are the goods which are used to manufacture the final goods or services. Examples: plant, machinery, computer, tools, etc.

Economics Concept Introduction

Introduction: Goods are the items that fulfils human demands. They can be of two types- capital goods and consumer goods.