Capital Goods and Consumer Goods: 

In economics, the term "capital goods" is a specialized term which refers to goods owned by individuals, organizations, or governments to be used in the production of other goods or commodities. Capital goods include factories, machinery, tools, equipment, and various buildings which are used to produce other products for consumption. Capital goods also refer to any material used or consumed to manufacture other goods and services. Capital goods are generally man-made, and do not include natural resources such as land or minerals, or "human capital"--the intellectual and physical skills and labor provided by human workers. Capital goods are important to businesses, because they use capital goods to help their business make functional goods for the buying public or to provide consumers with a valuable service. As a result, capital goods are sometimes referred to as "producers’ goods" or "means of production." One point to note is that the economic term "capital goods" should not be confused with the financial term "capital," which simply means money. A vital difference can also be seen between "capital goods" and "consumer goods". Consumer goods are products directly purchased by consumers for personal or household use. Consumer goods are alternately called final goods, and the second term makes more sense in perceiving the concept. Basically, consumer goods are goods or things that are purchased by average customers, and will be directly consumed or used right away. For example, cars are generally considered consumer goods because they are usually bought by an individual for personal use. Dump trucks, however, are usually considered capital goods, because they are used by construction and manufacturing companies to haul various materials in order to make other products such as roads, bridges, dams, and buildings. Similarly, a chocolate ice-cream is a consumer good but the machines used to produce the ice cream are considered as capital goods.