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Consumer and capital goods

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Capital goods are goods that are used to make consumer goods and services. Consumer goods and services are products which satisfy our needs and wants directly. This short revision video explains the difference with examples.

Published in: Economy & Finance
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Consumer and capital goods

  1. 1. Capital Goods and Consumer Goods & Services • Capital goods – Goods that are used to make consumer goods and services – Capital inputs include fixed plant and machinery, hardware, software, new factories and other buildings
  2. 2. Capital Goods and Consumer Goods & Services • Capital goods – Goods that are used to make consumer goods and services – Capital inputs include fixed plant and machinery, hardware, software, new factories and other buildings • Consumer goods and services – Goods and services which satisfy our needs and wants directly
  3. 3. Capital Goods and Consumer Goods & Services • Capital goods – Goods that are used to make consumer goods and services – Capital inputs include fixed plant and machinery, hardware, software, new factories and other buildings • Consumer goods and services – Goods and services which satisfy our needs and wants directly – There is a sub-division between: – i) Consumer durables: Products that provide a steady flow of satisfaction / utility over their working life (e.g. a washing machine or using a smartphone). – ii) Consumer non-durables: Products that are used up in the act of consumption e.g. drinking a coffee or turning on the heating) – iii) Consumer services: E.g. a hair cut or ticket to a show
  4. 4. Capital Goods help provide Consumer Goods Working capital Infrastructure Bulky Capital Digital platforms Servers Public good aspect of air traffic control

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