Explain the three classifications of a consumer.

A consumer is classified as follows:

1. Direct consumer: In the process of providing an income to the people, a variety of goods and services are produced in an economy. Initially goods are produced for self-consumption.  The producers for self-consumption are called direct producers. Consumers by exchanging goods: Gradually man realised that he cannot produce everything that he wants. Therefore, he has to depend on others to satisfy his wants. Some people were specialised in the production of wheat while few others specialised in the production of cloth. Each one of them produced more than one of his own requirements in order to exchange the surplus to obtain other goods of his requirement. Such a system is called the barter system.
2. Modern consumers: In the modern economy, producers produce goods and services and make them available in the market for sale. Consumers purchase these goods and services from the market at the best bargain prices. These goods and services are purchased through the exchange of money.