Types of economic goods

Question 1

What is an economic good?

Answer 1

Any good which has an element of scarcity

Question 2

What are the two types of economic goods?

Answer 2

Capital goods and Consumer goods

Question 3

What is a capital good?

Answer 3

Any good used to produce other goods and not for final consumption

Question 4

Give an example of a capital good

Answer 4

Tools, machinery, buildings, vehicle, computers, construction.

Question 5

What is a consumer good?

Answer 5

Goods used for the satisfaction of the consumer and not for the production of other goods

Question 6

Give an example of a consumer good

Answer 6

food, appliances, clothing, and automobiles

Question 7

Initially, factors of production are diverted to the production of capital goods. What is the effect on capital and consumer goods? And what will happen to the standard of living in the country in present?

Answer 7

-Capital goods increase
-Consumer goods decrease
-Standard of living decrease