Question

A company named Tech Info Ltd. manufactures printers. The company purchases machinery from Germany to manufacture printers. These printers are sold in the domestic and foreign markets to households and dealers. The machinery purchased and printers manufactured, both can be classified as final goods.

Do you agree with the given statement ? Give valid arguments in support of your answer.

Hint:

Sort by use. Machinery (investment) and printers sold to households (consumption) are final goods. Printers sold to dealers are for resale, so they are intermediate goods.

Answer 1

Step 1: Understanding the Concept:
A good is final or intermediate by the way it is used, not by what it is. A final good is used for consumption or investment. An intermediate good is used for production or for resale within the same year.

Step 2: Our stand:
We do not agree with the statement. Only some of the goods named in it are final goods.

Step 3: Machinery bought by Tech Info Ltd.:
The machinery is bought to make printers, and it is not used up in one year. It is a capital good meant for investment.
So the machinery is a final good.

Step 4: Printers sold to households:
Households buy printers for their own use. This is final consumption.
So the printers sold to households are final goods.

Step 5: Printers sold to dealers:
Dealers do not use the printers themselves. They buy them to sell again to customers in the same year.
This is resale, so these printers are intermediate goods.

Step 6: Put the classification together:

Item	Use	Class
Machinery bought from Germany	Investment	Final good
Printers sold to households	Consumption	Final good
Printers sold to dealers	Resale in the same year	Intermediate good

Final Answer:
No, the statement is not correct. The machinery and the printers sold to households are final goods, but the printers sold to dealers are intermediate goods because they are meant for resale.