Question

Classify each of the following items as a final good or service or an intermediate good or service and identify which is a component of consumption​ expenditure, investment, or government expenditure on goods and​ services:_____. Item 1. A haircut bought by a student Item 2. Mufflers bought by Ford Motor Co Item 3. New concrete mixers bought by Chicago Concrete Inc

Answer 1

Answer:

Correct Answer:

Final Good or Service:

1. A haircut bought by a student Item

(Component of investment)

Intermediate Good or Service.

2. Mufflers bought by Ford Motor Co Item

( Component of consumption​ expenditure )

3. New concrete mixers bought by Chicago Concrete Inc.

(government expenditure on goods and​ services)

Explanation:

In final good and service, the end benefits to the consumer is paramount. Because, there is no middle point for the goods or services rendered. On the other-hand, when the goods or service purchased is for the actualization of a given end product, then, the purchased goods or service is an intermediate goods or service.