Which of the following is an example of an intermediate good or service?
A) The purchase of a new yacht by a boating enthusiast
B) The purchase of lumber by a construction company
C) The salaries paid to military personnel
D) The salary earned by a construction worker

Question

Quizplus · Accepted Answer

An intermediate good or service is one that is used only as a component or input in the production of another good or service. Lumber is an example of an intermediate good because it is used as a raw material in the construction of buildings or other structures. The purchase of a yacht (A) is not an intermediate good because it is not used to produce anything else. The salaries paid to military personnel (C) and the salary earned by a construction worker (D) are not goods or services at all, they are payments for labor.

Which of the Following Is an Example of an Intermediate