Difference Between Consumer Goods and Capital Goods

Saturday, January 14, 2017


Economic goods are divided into two. They are consumer goods and producer (capital) goods.

i)     Consumer Goods
Ø They directly satisfy human wants
Ø They are used for final consumption. (Consumption refers to the using up of goods and services to satisfy human wants)
Ø Some of them are durable. (They can be used for a long period of time. Eg. Motor car)
Ø Others are non-durable (They have a short life. Eg. Cigarettes)

ii)    Capital Goods
Ø They indirectly satisfy human wants
Ø They are used to produce other goods and services
Ø They are used by producers but not consumers
Ø Most of them are durable. Eg. Machinery
Ø Some of them are non-durable. Eg. Raw materials
Ø They are also referred to as producer goods
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