What are Consumer Goods
pocosdotca on October 1st, 2012
Grab a coffee, this is a snoozer.
I’m sure to arouse the ire of some other armchair economists out there as I fumble and finesse this definition to fit the purposes of POCOs.ca, but here we go….
A Consumer Good is a good that is complete for final consumption/use. Consumer goods are separate from intermediate goods and raw materials. Intermediate goods are goods produced for further modification or incorporation into final goods (consumer goods), and raw materials are unmodified commodities. For example, a car is a consumer good, while the chassis is considered an intermediate good, and the steel used to create the chassis is a raw material.
Consumer Goods (also called final goods) can be divided into 3 categories:
1. Durable Goods: These are goods that are ready for final consumption and typically last longer than 3 years. Ex. Large appliances, household furniture, cars, etc…
2. Non-durable Goods: Goods that typically last less than 3 years and may be ready for immediate consumption. Ex. Small appliances, clothing, food, beverages, etc…
3. Services: These are intangible goods that are consumed as they are delivered. Ex. Lawn care, massages, etc…
Quick question: Is an airplane a consumer good?
A: No, or at least not likely (unless your last name is Trump or Branson). An airplane is considered a capital good – a final good used in the production of another good or service. An airplane is considered a capital good since they are generally purchased by airlines which use them to vend flights (a service) to their customers. Another example is a lathe purchased by a furniture manufacturer. The furniture produced by the manufacturer is a consumer good – provided it is used for individual, personal use – and the lathe is a capital good.
Since the scope of Consumer Goods manufactured within Canada is broad, POCOs.ca restricts its focus on Consumer Goods to non-service, non-food consumer goods. In other words:
Consumer Goods @ POCOs.ca =Consumer Goods - Services - Foods/Beverages.
- Kevin
POCOs.ca
