Intermediate Good (Elementary)
Intermediate goods, also known as elementary goods, are goods that are used in the production of other goods. They are not sold directly to consumers, but instead are used as inputs in the production of other goods. Intermediate goods are typically used in the production of finished goods, which are then sold to consumers. Examples of intermediate goods include raw materials, components, and parts.
History of Intermediate Goods
The concept of intermediate goods has been around since the early days of economics. Adam Smith, the father of modern economics, wrote about the concept of intermediate goods in his famous book, The Wealth of Nations. Smith argued that the production of goods was a complex process that involved the use of intermediate goods. He also argued that the production of goods was a process that could be broken down into smaller steps, each of which involved the use of intermediate goods.
Since then, the concept of intermediate goods has been further developed by economists. In the 20th century, economists began to focus on the role of intermediate goods in the production process. They argued that the use of intermediate goods was essential for the efficient production of goods. They also argued that the use of intermediate goods could help to reduce costs and increase productivity.
Table of Comparisons
| Goods | Directly Sold to Consumers | Used in Production of Other Goods |
|---|---|---|
| Finished Goods | Yes | No |
| Intermediate Goods | No | Yes |
Summary
Intermediate goods, also known as elementary goods, are goods that are used in the production of other goods. They are not sold directly to consumers, but instead are used as inputs in the production of other goods. Intermediate goods are typically used in the production of finished goods, which are then sold to consumers. Examples of intermediate goods include raw materials, components, and parts. For more information about intermediate goods, you can visit websites such as Investopedia, The Balance, and the World Bank.
See Also
- Finished Goods
- Raw Materials
- Components
- Parts
- Production Process
- Adam Smith
- The Wealth of Nations
- Economics
- Costs
- Productivity
