Question : Which of the following statement are true as per the mechnaism given in the picture.
- Cotton and thread are final goods whereas cloth is an intermediate good.
- As long as, goods are under production boundry, they are intermediate goods.
- Goods outside production boundry are consumer goods.
- Final goods and consumer goods are different from eachother.
Option 1: 1,2&3
Option 2: 3&4
Option 3: 1&4
Option 4: 2&3
Answer (1)
17th Jan, 2024
Correct Answer: 2&3
Solution :
The boundary of the production process is an imaginary line. Any products or services that cross this boundary are regarded as final items. Production-bound items are regarded as intermediate goods that require value addition.
All consumer goods are final goods.
Hence, Option D is correct.
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