Consumer goods are products that are consumed or used by the customer and intended for the mass market.

Are consumer goods the same as final goods?

“Final goods” are the ultimate physical output of an economy. All other goods, called “intermediate goods,” are used as an inputs in the manufacture of another product.

Thus, consumer goods are a specific type of final good. Consumer goods are final goods that are intended for a very large group of consumers, the so-called “average” consumer. Many final goods, such as extremely expensive jewelry, are not consumer goods. However, all consumer goods are final goods.

How are consumer goods and Gross Domestic Product related?

Gross Domestic Product (GDP) is equal to the total expenditure on all final goods and services produced domestically during a set period. Since all consumer goods are final goods and consumer goods compromise a large portion of final goods, consumer goods are a key component of GDP.

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• Red Goods Food products that are consumed at a fast rate and...
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Orange goods are consumer goods that will be replaced at a moderate rate. Consumer goods, also called “final goods,” are items purchased by customers for use or consumption. Clothing is the classic example of an orange good because, though most clothes are fairly durable, clothing will be replaced at moderate intervals due to factors such as damage or changes in preferred style.

What are other categories of goods?

There are two categories of goods similar to orange goods, which vary primarily on how quickly the good must be replaced:

• Yellow goods are consumer goods that are nonconsumable and will be replaced at a slow rate.  Yellow goods include household appliances such as refrigerators and dishwashers. Yellow goods generally have a high profit margin for manufacturers.
• Red goods are consumer goods that are consumed quickly and thus replaced quickly. The classic example of red goods are food products. Red goods also generally have a low profit margin for manufacturers.

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Yellow goods are consumer goods that are nonconsumable and will be replaced at a slow rate.  Consumer goods, also called “final goods,” are items purchased by customers for use or consumption.  Yellow goods include household appliances such as refrigerators and dishwashers. Yellow goods generally have a high profit margin for manufacturers.

What are other categories of goods?

There are two categories of goods similar to yellow goods, which vary primarily on how quickly the good must be replaced:

• Orange goods: consumer goods that will be replaced at a moderate rate. Clothing is the classic example of an orange good because, though most clothes are fairly durable, clothing will be replaced at a moderate rate due to factors such as damage or changes in preferred style.
• Red goods are consumer goods that are consumed quickly and thus replaced quickly. The classic example of red goods are food products. Red goods also generally have a low profit margin for manufacturers.

Related posts

• Orange Goods Goods that consumers change at a moderate rate because of...
• Red Goods Food products that are consumed at a fast rate and...
• Profit Margin Net income expressed as a percentage of net sales....

Red goods are consumer goods that are consumed quickly and thus replaced quickly. Consumer goods, also called “final goods,” are items purchased by customers for use or consumption.  The classic example of red goods are food products. Red goods also generally have a low profit margin for manufacturers.

What are other categories of goods?

There are two categories of goods similar to red goods, which vary primarily on how quickly the good must be replaced:

• Orange goods: consumer goods that will be replaced at a moderate rate. Clothing is the classic example of an orange good because, though most clothes are fairly durable, clothing will be replaced at a moderate rate due to factors such as damage or changes in preferred style.

• Yellow goods: consumer goods that are nonconsumable and will be replaced at a slow rate. Yellow goods include household appliances such as refrigerators and dishwashers. Yellow goods generally have a high profit margin for manufacturers.

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• Yellow Goods Means expensive and durable household items....
• Orange Goods Goods that consumers change at a moderate rate because of...
• Profit Margin Net income expressed as a percentage of net sales....

Recycling is the processing of used materials into new products.

What are the types of recycling?

Due to economic and technological constraints, used materials are rarely recycled into the same new product. Instead, used materials are generally recycled into a different new product. Depending on the relative value of the used and new products, materials are said to be either down-cycled or up-cycled.

• Down-cycled: when the new product created from a recycled used product is less expensive or less desirable than the original product. For instance, high-quality paper is usually down-cycled into less valuable copy paper that has ink residue and shorter fibers than the original high-quality paper.

• Up-Cycled: when the new product created from a recycled used product is more expensive or more desirable than the original product. This is uncommon in practice, with the best examples being “junk-yard art.” Junk-yard art often consists of discarded items being transformed through creative display or combination into display pieces.

What are common criticisms of recycling?

Recycling itself is generally not criticized. Instead, government supported or mandated recycling programs are usually the targets of criticism such as:

• Voluntary recycling will occur if recycling a particular resource actually saves resources because there will be market incentives.
• Jobs in the recycling sector are generally less desirable than the jobs they replace in the extraction industry.
• The process of recycling is more energy intensive than traditional trash disposal and manufacture from unrecycled materials.

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In business, recourse is the contractual right to demand payment for a debt from the individual or entity who owes it. Thus, a recourse loan is an obligation that allows the lender to to come after the borrower’s assets if repayment is not made. A nonrecourse loan limits the right of the lender to demand payment to only the actual asset that is being financed, freeing the borrower from personal liability. Home mortgages are the most common example of a nonrecourse loan.

What are the types of recourse loans?

• Full recourse loan: a lender may take any assets of the borrower if repayment is not made.
• Limited recourse loan: a lender may only take assets specifically named in the loan agreement if repayment is not made.

What is the difference between a limited recourse loan and a nonrecourse loan?

A limited recourse loan and a nonrecourse loan differ because the assets specified in a limited recourse loan are not the assets actually being financed by the loan. For instance, a personal loan that specifies jewelry as collateral but shields the borrower’s other assets is a limited recourse loan. A loan for the purchase of jewelry that specifies the jewelry itself as collateral and shields the borrower’s other assets is a nonrecourse loan.

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A rack jobber is a distributor of specialized non-food retail goods. Rack jobbers’ goods are generally displayed and sold on racks provided by the rack jobbers rather than on the normal shelves of the store.

Rack jobbers often deliver, track inventory and finance the goods while sharing the profits with the retailer that provides the physical location for the goods’ display and sale.

Rack jobbers usually work with grocery stores, pharmacies and hardware stores.

What is the origin of the term “rack jobber”?

A “jobber” is a person that acts as a middleman, buying merchandise from manufacturers and selling it to retailers. Thus the term “rack jobber” refers specifically to the fact that these middlemen usually provide their own racks for displaying the merchandise.

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Profit margin is a measure of how much of every dollar a company brings in a sales it keeps after costs as earnings. Profit margin is also called “Net Profit Margin,” “Net Margin,” and “Net Profit Ratio.”

How is profit margin calculated?

Profit Margin = (Net Profit / Revenue) * 100

Net Profit is a company’s gross profit minus overhead, interest, and generally taxes as well; where gross profit is defined as revenue minus the costs of manufacturing a product or providing a service.

For example, if company X has net profit of $100 million on revenue of $500 million, its profit margin is 20% [ (100 / 500) * 100 ].

Why is profit margin important?

A high profit margin indicates that a company has flexibility in its pricing because a small reduction in pricing will not erase its profits.

Profit margins for companies in different industry cannot be compared directly, however, as the costs of operating and financing a business in different sectors vary greatly and monopoly pricing capabilities from patents may or may not apply. For example, the average profit margin of “major drug manufacturers,” more commonly called pharmaceutical companies, was 17.6% in 2009 while the average profit margin of “grocery stores” is 1.5%.

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Net Domestic Product (NDP) is a measure of a nation’s production, or the size of its economy, that is adjusted for depreciation.

How is Net Domestic Product calculated?

Net Domestic Product = Gross Domestic Product (GDP) - Depreciation

Gross Domestic Product (GDP) is the total dollar value of all goods and service produced in anation over a specific time period. GDP is often thought of as the size of an economy.

Broadly, depreciation is the loss in value of an asset due to obsolecence, use, decay or other factors. In the above equation, the depreciation is sometimes referred to as the “capital consumption allowance” because it represents the amount of money needed to replace the capital that was consumed in the period.

Why is Net Domestic Product important?

A widening gap between GDP and NDP indicates that the capital stock of a country is not being replaced. In the long-run, such a gap will cause GDP to fall because production depends on a nation’s capital stock.

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The extractive industry is the business sector that physically removes exhaustible raw materials - such as metals, minerals, rocks, and oil - from the Earth.

How does the extractive industry fit into the structure of a nation’s economy?

A nation’s economy can be broadly broken into three basic industries:

• Primary industry is any activity that yields a physical product that does not require processing. Primary industry can be divided into two categories: extractive industry and genetic industry. Genetic industry is the harvesting of materials that can be made more plentiful through human intervention; thus, the genetic industry includes forestry, fishing and farming.

• Secondary industry is all manufacturing, whether of consumer, nonconsumer or capital goods. Energy production, such as oil refining, is considered a part of the secondary industry though oil drilling is considered a part of the extractive industry. The secondary industry can be divided into three categories: small-scale, light and large-scale industry.

• Tertiary industry is synonymous with the service industry. It produces no tangible goods.

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