The Basic Difference Between Consumer Goods and Capital Goods Is

question 261

Multiple Choice

The basic difference between consumer goods and capital goods is that

• A) consumer goods are produced in the private sector and capital goods are produced in the public sector.
• B) an economy that commits a relatively large proportion of its resources to capital goods must accept a lower growth rate.
• C) the production of capital goods is not subject to the law of increasing opportunity costs.
• D) consumer goods satisfy wants directly, while capital goods satisfy wants indirectly.

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Definitions:

Net Income

This refers to the amount of money a company earns after subtracting all its expenses, taxes, and costs from its total revenue.

Ending Inventory Value

The total value of all the goods available for sale at the end of a financial period.

LIFO Periodic

An inventory accounting method where the last items purchased are the first ones used in costing inventory, applied at the end of the accounting period.

Inventory Value

The total cost or market value of all the goods and products held by a company intended for sale in the ordinary course of business.