1. The goods and services produced fall into two types:

consumption goods and services and capital goods. A hamburger is a consumption good and a haircut is a consumption service. An oil rig and auto assembly line are capital goods. A consumption good or service is an item that is bought by individuals or the government and is used up in the current period. A capital good is bought by businesses or the government and it is used over and over again to produce other goods and services.