classify each of the following items as final goods or services or intermediate good or service...

classify each of the following items as final goods or services or intermediate good or service and identify each as either consumption expenditure or investment or governemt expenditure

coffee beans boight by starbucks

new coffee grinders bought by starbucks

starbucks grande mocha bought by student

new battle ship bought by US navy

Expert Solution

Coffee beans bought by Starbucks.

This is an intermediate good, because these coffee beans will be used further for making coffee. Hence, coffee is a final good and coffee beans are intermediate good. Coffee beans are consumption expenditure, because starbucks will use or consume it in the making of coffee which it will sell. Hence, it is a consumption expenditure

new coffee grinders bought by starbucks

This is final good, which will be used for final consumption ie grinding coffee beans. Coffee grinders do not require further processing and hence are final goods. Coffee grinders bought by starbucks are investment expenditure. Grinder is an equipment that is necessary for buisness, and hence will help in production process and hence it is an investment expense

starbucks grande mocha bought by student

This is a final good, because starbucks grande mocha does not require further processing and will be directly consumed by the student. starbucks grande mocha bought by student is a consumption expenditure, because it is bought solely for the consumption purpose.

new battle ship bought by US navy

This is a final good, bought for using in battle/war. Since, it is bought by US Navy (Government) this is a government expense.

Rahul Sunny answered 1 day ago

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