Which of these is a final good?

A new tractor bought by a farmer for his fieldsCorrect answerYour answerSteel bought by a car makerCorrect answerYour answerCotton bought by a spinning millCorrect answerYour answerElectricity bought by a factory to run its loomsCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

The tractor is not used up in one year's production; it is added to the farmer's capital stock.
A capital good bought for investment is a final good. Steel, cotton and the factory's electricity are inputs used up in production.

Worth noting

A tractor is used in production, but it is not used up; that is why it is final.

Concept: Capital goods are final
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsFinal and intermediate goods

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Ten questions from Basic Concepts & the Circular Flow, at your own pace.

Which of these is a final good?

Explanation