Question

___________ goods are called as goods of first order.

• A. Supply
• B. Consumer
• C. Transferability
• D. Durability

Hint:

Hierarchy of Goods in Economics:
- 1st Order \(\rightarrow\) Consumer Goods (Direct satisfaction).
- Higher Orders \(\rightarrow\) Producer Capital Goods (Indirect satisfaction through production).

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
In economics, goods can be classified into different "orders" based on their proximity to satisfying human wants directly.
This classification system was introduced by Carl Menger, the founder of the Austrian School of Economics.

Step 2: Detailed Explanation:
According to this classification:
- Goods of the First Order (Consumer Goods): These are finished goods that are ready for immediate consumption by consumers to satisfy their wants directly (e.g., bread, water, clothes).
- Goods of the Second Order: These are goods or inputs used directly in the production of first-order goods (e.g., flour and yeast used to bake bread).
- Goods of the Third Order: These are inputs used to produce second-order goods (e.g., wheat and grinding mills used to make flour).
- This chain continues to higher orders of producer or capital goods.
Because consumer goods satisfy human wants directly without requiring any further processing, they are termed "goods of the first order".
The other options (Supply, Transferability, and Durability) are either economic concepts or properties of goods, but do not represent a category of goods in this hierarchy.

Step 3: Final Answer:
Consumer goods are called as goods of first order.