Which of the following best describes an intermediate good in economics?

• A. A good that is used as an input in the production of other goods and is not sold directly to consumers.
• B. A good that is exported to other countries as a finished product.
• C. A good that is produced by government agencies for public use.
• D. A good that is purchased by households for final consumption.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the definition of an intermediate good in economics. An intermediate good is a product used as an input in the production process of other goods or services, rather than being sold directly to the final consumer.
2. Step 2: Identify the key characteristic of intermediate goods: they are not final products but are used to produce final goods. This means they are part of the production chain and are transformed or combined with other inputs.
3. Step 3: Compare the options given with the definition. For example, a good exported as a finished product is a final good, not intermediate. Similarly, goods produced by government agencies or purchased by households for final consumption are final goods or services.
4. Step 4: Recognize that the correct description of an intermediate good is one that is used as an input in the production of other goods and is not sold directly to consumers.
5. Step 5: Conclude that the best answer matches the definition of intermediate goods, emphasizing their role in production rather than final consumption or export.