Intermediate Goods
Not "good" as in the moral sense, like good vs. evil. An intermediate good isn't something that's not that great, but not that bad. Like giving a homeless person a nickel.
No, we're talking goods, like goods and services. Something you make. A product.
So what about the "intermediate" part? Well, it's like it sounds. Intermediate. In-between.
An intermediate good is a product that is manufactured, but is usually not sold directly to consumers. Instead, intermediate goods are used as a part of another product...one that is larger or more intricate.
Think: car parts. Fuel lines and spark plugs and that sort of thing.
Sometimes, these get sold to regular consumers at auto parts stores. But usually, they're bought by car manufacturers and become building blocks for a larger product: the car.
Construction materials are another example. Two-by-fours. Nails. Whatever it is that goes into spackle. You don't just buy a nail and display it on your coffee table as an art item. Okay, maybe you do. But that's not typical. When you buy a nail, it's a means to an end. You're building something else, and you need a nail to hold it together. It's not the final good. It's intermediate.
A lot of food products fall into this category as well.
Think about sugar. Now, sometimes you might sit in front of the TV with a bag of sugar on your lap, spooning heaps of it into your maw. But usually it's used as an ingredient. To make cookies, say...which you'll then shovel into your maw while watching TV.
Now, you might use a lot of sugar to make the stacks and stacks of cookies you eat on a daily basis. But your consumption pales in comparison to a big-time manufacturer.
Take Hypo Industrial Confectionary Treats, Inc. It buys sugar by the ton, and turns it into millions of packages of Sweet Obesity cookies, which it ships to grocery stores around the world. The sugar itself was manufactured. Transformed from sugar cane at a factory into the white, crystally stuff you recognize. Sometimes, that just gets bagged and sent to the store, where you (as the consumer) can buy it. If that happens, it gets counted as a final good. But more of it gets shipped off to Hypo Industrial Confectionary, where it becomes an ingredient in Sweet Obesity cookies. The sugar here is an intermediate good. The cookies are a final good.
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Econ: What are Intermediate Goods?5 Views
And finance Allah Shmoop What are intermediate goods Oh not
good as in the moral sense Like good versus evil
An intermediate good isn't something that's not that great but
not that bad Like you know giving a homeless person
a nickel No we're talking about goods like goods and
services like something you make a product So what about
the intermediate part of this term Well like it sounds
you know intermediate like in between Enter the medium or
something like that but not in terms of size Not
like small good A single ice cream Sprinkle large good
U S Nimitz Intermediate Good mini Cooper No that's not
quite with term Intermediate good means either An intermediate good
is a product that is manufactured but is usually not
sold directly to consumers Instead intermediate goods air used as
a part of another product one that is larger or
more intricate Think car parts like fuel lines and spark
plugs And you know that kind of stuff Well sometimes
these gets sold to regular consumers at auto parts stores
but usually they're bought by car manufacturers and become building
blocks for a larger product like what's it called Oh
Yeah a car Well construction materials are another example here
Intermediate goods two by fours nails Whatever it is that
goes into spackle you don't just buy a nail on
display it on your coffee table As you know an
art item Okay maybe you do but normal people don't
When you buy a nail it's a means to an
end You're building something else and you need a nail
toe Hold it together It's not the final good It's
intermediate A lot of food products fall into this category
as well Think about sugar Now Sometimes you might sit
in front of the TV with a bag of sugar
on your lap spooning heaps of it into your gaping
maw Well usually it's used as an ingredient to make
cookies You know which you'll then shovel into your ma
while watching TV After a bad break up you might
use a lot of sugar to make the stacks and
stacks of cookies you eat on a daily basis but
your consumption pales in comparison to a big time manufacturer
You know chews up a lot of sugar in their
products So let's take Hypo Industrial Confectionery treats global It
by sugar by the ton and turns it into millions
of packages of sweet obesity cookies which it chips to
grocery stores for good little boys and girls all around
the world with sugar itself was manufactured transformed from sugar
cane at a factory in Colombia somewhere into the white
crystal Lee stuff that you recognised Well sometimes that just
gets bagged and sent to the store where you as
the consumer can buy it If that happens it gets
counted as a final good But more of it get
shipped off to Hypo Industrial Confectionery Global where it becomes
an ingredient and intermediate in sweet obesity cookies with sugar
Here is the intermediate good the cookies or the final 00:02:49.793 --> [endTime] good and we mean yeah good Tasty