Question

20. Which of the following goods is an intermediate good? a. lettuce that a restaurant buys to put on sandwiches b. tires that a tire company sells to consumers at its retail stores c. a television set that Mai buys to put in her college dorm room d. a new winter coat that Joann buys for her son

Answer 1

From the following options, the example of intermediate goods is -

Lettuce that a restaurant buys to put on sandwiches.

Intermediate goods are those goods which are purchased for either resale or for further production of goods.

Now in this question, lettuce is purchased which acts as an intermediate good for the restaurant for making sandwiches.

Hence option A is correct

B) Tires that a tire company sells to consumers at its retail stores.

So, in this case, the tire company is selling the tires directly to the consumers for the end-use hence these are final goods.

However, if the tire company sells these tires to the car company then these goods will come into the category of intermediate goods.

C) A television set that Mai buys to put in her college dorm room is an example of a final good. As the television is purchased for direct consumption and not for further sale or production hence these are final goods.

D) A new winter coat that Joann buys for her son is also an example of a final good. As the coat is purchased for direct consumption by her son and not for further sale or production hence these are final goods.