Which of the following transactions represents the purchase of a final good?

• A. A car manufacturer purchases steel for production
• B. A student buys a textbook for a college course
• C. A restaurant buys vegetables to prepare meals
• D. A bakery buys flour to make bread

Answer: (B)

Verified step by step guidance

1. Understand the definition of a final good: A final good is a product that is purchased by the end user and is not used to produce another good or service.
2. Identify intermediate goods: These are goods used as inputs in the production of other goods. For example, steel, vegetables, and flour are typically intermediate goods because they are used to produce cars, meals, and bread respectively.
3. Analyze each transaction to determine if the good is a final good or an intermediate good. For instance, when a car manufacturer buys steel, the steel is an intermediate good because it will be used to produce cars.
4. Recognize that when a student buys a textbook for a college course, the textbook is a final good because it is purchased for direct use and not for further production.
5. Conclude that the transaction where a student buys a textbook represents the purchase of a final good, while the other transactions involve intermediate goods.