Question

Read the following statements carefully:

Statement 1: Final goods are those goods which normally lose their identity in the production process.

Statement 2: Final goods may get transformed during the consumption process by a consumer.

Options

• Statement 1 is true and statement 2 is false.

• Statement 1 is false and statement 2 is true.

• Both statements 1 and 2 are true.

• Both statements 1 and 2 are false.

Answer 1

Statement 1 is false and statement 2 is true.

Explanation:

• Final goods are items meant for ultimate use and do not undergo further transformation in the production process (goods that lose their identity in production are intermediate goods).
• However, final goods can be transformed during consumption by the purchaser (for example, tea leaves are brewed into tea or raw food is cooked at home), so Statement 2 is true.