The correct option is Tea leaves purchased by a restaurant for brewing tea to sell..
Explanation
In National Income Accounting, goods are classified as Final Goods or Intermediate Goods based on their end-use.- Final Goods: Goods used for final consumption (by households) or for capital formation/investment (by firms). They cross the production boundary and are not resold or transformed in the same year.
- Intermediate Goods: Goods used as raw materials for further production or purchased for resale in the same year. Their value is merged into the value of the final product.
Option Analysis:
- Tea leaves purchased by a consumer for home use. Tea leaves purchased by a consumer for home use: These are meant for direct satisfaction of human wants (consumption). Hence, they are Final Goods.
- Tea leaves purchased by a restaurant for brewing tea to sell. Tea leaves purchased by a restaurant: These are used as raw materials (inputs) to produce tea, which is then sold to customers. The value of the leaves is included in the final price of the brewed tea. Hence, they are Intermediate Goods.
- A car purchased by a household. A car purchased by a household: This is a consumer durable good used for final consumption. Hence, it is a Final Good.
- A machine purchased by a factory. A machine purchased by a factory: This is a capital good. While it aids in production, it is not used up or transformed in a single production cycle like raw materials. Expenditure on such machinery is treated as Investment. Hence, it is a Final Good.
Key Takeaway:
The distinction between a final good and an intermediate good depends strictly on its end-use. If a good is used for resale or completely used up in the production process during the year, it is an intermediate good; otherwise, it is a final good.