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Question :

Assertion (A): There is no clear cut demarcation between capital and consumer goods.
Reason (R): It depends upon the ultimate use of the good.

Option 1: Both A and R are true and R is the correct explanation of A.

Option 2: Both A and R are true, but R is not the correct explanation of A.

Option 3: A is true, but R is false.

Option 4: A is false, but R is true.


Team Careers360 9th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Both A and R are true and R is the correct explanation of A.


Solution :

There is no clear cut line of demarcation between consumption goods and capital goods. Same good can be a consumption goods and also a capital goods depending upon its ultimate use of the commodity.
For example- A machine purchased by a household for own consumption will be treated as a consumption goods and if the same machine is purchased by a firm to carry out his business activities at it as a capital goods.
Hence, Option A is correct.

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