Which of the following are final goods or services, and which are intermediate goods or services? a. A haircut purchased from a hair salon b. A new automobile c. An oil filter purchased in a new automobile d. Crude oil

Q: Expert Answer

(a) To determine Identify the hair cut purchased from the hair salon is a final goods and services or intermediate goods and services. Explanation Hair cut purchased from the hair salon is a final services. The reason is, for the hire cutting, this is the final or ultimate service the consumer can available. Concept Final goods: These goods are not used as raw materials for the production of other commodities during the accounting year. (b) To determine Identify a new automobile is a final goods and services or intermediate goods and services. Explanation A new automobile is a final good and it can be go for ultimate consumption by the consumer or this can consumed and utilized directly by the consumers themselves. (c) To determine Identify an oil filter purchased in a new automobile is a final goods and services or intermediate goods and services. Explanation Purchase of oil filter in a new automobile is an intermediate good. It is consumed along with the automobile and oil filter cannot use alone. Concept Intermediate goods: These goods may be used as raw materials for the production of other goods during the accounting year. (d) To determine Identify crude oil is a final goods and services or intermediate goods and services. Explanation Crude oil is an intermediate goods, because it is considered as a raw material and it cannot used alone.

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Economics For Today

10th Edition

Tucker

Publisher: Cengage Learning

ISBN: 9781337613040

Chapter 15, Problem 1SQP

Textbook Problem

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Which of the following are final goods or services, and which are intermediate goods or services?

a. A haircut purchased from a hair salon

b. A new automobile

c. An oil filter purchased in a new automobile

d. Crude oil

(a)

To determine

Identify the hair cut purchased from the hair salon is a final goods and services or intermediate goods and services.

Explanation of Solution

Hair cut purchased from the hair salon is a final services. The reason is, for the hire cutting, this is the final or ultimate service the consumer can available.

Economics Concept Introduction

Final goods: These goods are not used as raw materials for the production of other commodities during the accounting year.

(b)

To determine

Identify a new automobile is a final goods and services or intermediate goods and services.

Explanation of Solution

A new automobile is a final good and it can be go for ultimate consumption by the consumer or this can consumed and utilized directly by the consumers themselves.

(c)

To determine

Identify an oil filter purchased in a new automobile is a final goods and services or intermediate goods and services.

Explanation of Solution

Purchase of oil filter in a new automobile is an intermediate good. It is consumed along with the automobile and oil filter cannot use alone.

Economics Concept Introduction

Intermediate goods: These goods may be used as raw materials for the production of other goods during the accounting year.

(d)

To determine

Identify crude oil is a final goods and services or intermediate goods and services.

Explanation of Solution

Crude oil is an intermediate goods, because it is considered as a raw material and it cannot used alone.

Chapter 15 Solutions

Economics For Today

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