Difference Between Consumer Goods and Capital Goods

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