Suppose that a baker buys flour from a store to bake a wedding cake that has been sold to a couple getting married. In this case, the flour is an example of _____ good, and the cake is an example of _____ good.

Question

Quizplus · Accepted Answer

The flour is an intermediate good because it is used in the production process of another good, the wedding cake. The wedding cake is a final good because it is the end product sold to the consumer, in this case, the couple getting married.

Suppose That a Baker Buys Flour from a Store to Bake