Chapter 69, Problem 1MCQ

To determine

The example of physical capital.

Answer to Problem 1MCQ

From the available options, the correct example of physical capital is welding equipment.

Explanation of Solution

As physical capital is a tangible thing which means education cannot be part of physical capital. Moreover, lumber and farmland are natural resources that are not created by human beings therefore, lumber and farmland are also not included in physical capital. Furthermore, manual labor is a human resource that cannot be included in physical capital.

But welding equipment is a tangible thing or device, which is made by human beings to take its support in the manufacturing of different goods. Therefore, it is a physical capital which means option b (welding equipment) is the correct option.

Economics Concept Introduction

Introduction: Physical capital refers to the tangible goods which are made by human beings and used in the process of manufacturing or the production of goods.