Question

Describe in brief the difference between consumption goods and capital goods.

Answer 1

S. No.	Consumption Goods	Capital Goods
(i)	Consumption goods are those goods which are used by end-users to satisfy their needs and desires.	Capital goods are those goods which are used to produce other goods and services.
(ii)	These goods are consumed fully after purchase.	Those goods are not consumed fully after purchase.
(iii)	Consumption goods are not used as raw material to produce new goods.	Capital goods are used as raw material to produce new goods.
(iv)	Being final product, these are included in the calculation of national income.	Since these are not final goods, these are not included in the calculation of national income.
(v)	Food, clothes, vehicle, radio, television, books, etc. are the examples of consumer goods.	Machines,furniture, tools, equipment buildings, dams, canal and plants for generation of electricity, etc. are examples of capital goods.