Which of the following is the best example of an intermediate good?
A)a tire purchased by an auto company
B)a new house purchased by a newly married couple
C)grain sold to foreign farmers
D)All of the above are intermediate goods.

Question

Which of the following is the best example of an intermediate good?
A)a tire purchased by an auto company 
B)a new house purchased by a newly married couple 
C)grain sold to foreign farmers 
D)All of the above are intermediate goods.

Quizplus · Accepted Answer

An intermediate good is a good that is used as a component or input in the production of another good. A tire purchased by an auto company would be considered an intermediate good as it is used in the production of cars. The other options are not intermediate goods as they are either final goods (new house purchased by a newly married couple) or exports (grain sold to foreign farmers).

Which of the Following Is the Best Example of an Intermediate