Orrin mines iron ore,which he sells to Thorin,who turns iron ore into steel.The steel is sold to Gorin,who turns the steel into battle axes.The battle axes are sold by a merchant in the city to adventurers.Which of the following would be considered a final good?
A) the iron ore
B) the steel
C) the battle axes sold to the merchant
D) the battle axes sold to the adventurers

Question

Quizplus · Accepted Answer

The final good is the good that is sold to the ultimate consumer, in this case, the adventurers. The battle axes sold to the merchant are still an intermediate good because they have not yet reached their final destination. Similarly, the steel sold to Gorin is also an intermediate good because it is not yet in its final form. Finally, the iron ore mined by Orrin is also an intermediate good because it has not yet been transformed into steel.

Orrin Mines Iron Ore,which He Sells to Thorin,who Turns Iron