What are Capital goods and Consumer goods?



What are Capital goods and Consumer goods?

It has been a difficult task for the students of Economics to distinguish between capital and consumer goods. Anything which is used to make another good is called a capital good and something which is not used to make another product is called a consumer good.

Machine in a factory- capital good
Machine in a factory is a perfect example of a capital good because it is used to produce shirts.

Shirt-consumer good
Shirt is a perfect example of a consumer good as it not being used to make another thing

Computer- both capital and consumer good
Computer can act as both capital and good. If you are using computer to play games it would be considered to be a consumer good, but if you use the computer to generate some reports or make same video games and programs it would be considered to be a capital good.






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One Responseto “What are Capital goods and Consumer goods?”

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