Explain how the government is both a consumer and a producer and give one example of the government playing each role.

2 Answer

  • One of the ways that the government can become a consumer is that in its construction projects, they are dependent on manufacturers of cement, gravels, and others. There are still lots and lots of examples of this. Then, a way that it becomes the producer is when it lets the citizens pay for all the permits. They produce the permits and actually earn money from it. They use this money for different projects.¬†
  • The government performs the role of both the consumer and the producer in various ways like importing the less or scarce resources(consumer) and exporting the abundant resources (producer).

    Government provides and performs various functions for the betterment and running of the nation smoothly so that sustainable growth can be achieved by the nation.

    Role of government

    • Consumer is referred to as the person who consumes such goods not for the intention to resell such products but to be the end receiver of benefits whether or not by paying the price for such goods.

    • Producer is referred to as a person who produces the goods of such kind with a pure intention to sell further and thereby earning profits over such investments.

    • Government performs the function of a consumer when it imports or a scarce good benefitseap the benefits out of such purchase.

    • Government is a producer when it sells it goods or services to other party, either by way of export or co-producers role in case of intra-term. e.g. port. e.g USA government produces corn and exports to other countries.

    • Consumer role is played by the government when a country, say India, ¬†imports the weapons and missiles for defense system to stay protected from the attacks by enemies and attack in the first place as well.

    Hence, the role of a producer and consumer is played by the government in the cases mentioned above.

    To know more about consumers and producers, click the link below.