Chapter 38, Problem 2MCQ

To determine

To find: An example of physical capital

Answer to Problem 2MCQ

Option A is correct.

Explanation of Solution

Option A is correct

Machinery is an example of physical capital. Physical capital includes goods that are tangible in nature that aids the production of goods and services.

Option B is incorrect

Health care is not a tangible good, therefore it does not constitute physical capital.

Option C is incorrect

Education is not a tangible good, therefore it does not constitute physical capital.

Option D is incorrect.

Money is not a physical capital as intrinsic value of money does not help in production of good.

Option E is incorrect.

All of the above is in valid.

Economics Concept Introduction

Physical capital is a tangible product that helps in production of output. This includes usually machinery, tools, buildings, equipment etc.