Which of the following would be considered physical capital?
A)the pizza oven at the Liquidity Preferences Tavern
B)soy beans used to make soy milk
C)the skills and knowledge of a barber
D)the number of hours people spend in the gym

Question

Quizplus · Accepted Answer

Physical capital refers to tangible assets used in the production of goods and services. The pizza oven at the Liquidity Preferences Tavern is a tangible asset used in the production of pizza, making it physical capital.

Answer: B, C, and D are not physical capital because they do not refer to tangible assets used in the production of goods and services. Soybeans, skills and knowledge, and hours spent in the gym are all intangible and do not fit the definition of physical capital.

Which of the Following Would Be Considered Physical Capital