Econ: What are Intermediate Goods?

What are Intermediate Goods? Intermediate goods are products used to make final goods, such as raw and alloy materials, commodities, and components. For example, aluminum is used for making aircraft; sugar for sweetening foods and beverages, and electronic parts are used for making devices, such as computers and smartphones.

FinanceEcon
LanguageEnglish Language

Transcript

00:20

services like something you make a product So what about

00:24

the intermediate part of this term Well like it sounds

00:27

you know intermediate like in between Enter the medium or

00:31

something like that but not in terms of size Not

00:34

like small good A single ice cream Sprinkle large good

00:38

U S Nimitz Intermediate Good mini Cooper No that's not

00:42

quite with term Intermediate good means either An intermediate good

00:45

is a product that is manufactured but is usually not

00:48

sold directly to consumers Instead intermediate goods air used as

00:53

a part of another product one that is larger or

00:56

more intricate Think car parts like fuel lines and spark

01:00

plugs And you know that kind of stuff Well sometimes

01:03

these gets sold to regular consumers at auto parts stores

01:06

but usually they're bought by car manufacturers and become building

01:09

blocks for a larger product like what's it called Oh

01:12

Yeah a car Well construction materials are another example here

01:16

Intermediate goods two by fours nails Whatever it is that

01:19

goes into spackle you don't just buy a nail on

01:21

display it on your coffee table As you know an

01:24

art item Okay maybe you do but normal people don't

01:27

When you buy a nail it's a means to an

01:29

end You're building something else and you need a nail

01:32

toe Hold it together It's not the final good It's

01:35

intermediate A lot of food products fall into this category

01:38

as well Think about sugar Now Sometimes you might sit

01:41

in front of the TV with a bag of sugar

01:43

on your lap spooning heaps of it into your gaping

01:46

maw Well usually it's used as an ingredient to make

01:49

cookies You know which you'll then shovel into your ma

01:52

while watching TV After a bad break up you might

01:55

use a lot of sugar to make the stacks and

01:57

stacks of cookies you eat on a daily basis but

01:59

your consumption pales in comparison to a big time manufacturer

02:02

You know chews up a lot of sugar in their

02:04

products So let's take Hypo Industrial Confectionery treats global It

02:09

by sugar by the ton and turns it into millions

02:12

of packages of sweet obesity cookies which it chips to

02:16

grocery stores for good little boys and girls all around

02:19

the world with sugar itself was manufactured transformed from sugar

02:23

cane at a factory in Colombia somewhere into the white

02:26

crystal Lee stuff that you recognised Well sometimes that just

02:29

gets bagged and sent to the store where you as

02:32

the consumer can buy it If that happens it gets

02:34

counted as a final good But more of it get

02:38

shipped off to Hypo Industrial Confectionery Global where it becomes

02:42

an ingredient and intermediate in sweet obesity cookies with sugar

02:46

Here is the intermediate good the cookies or the final 00:02:49.793 --> [endTime] good and we mean yeah good Tasty