Which of the following items are considered physical capital?
I. shares of Ford stock traded on the New York Stock Exchange
II. the Taco Bell store nearest you
III. the rental cars owned by Hertz Rental-A-Car
IV. the salaries paid to Intel executives
A) II and III
B) I and IV
C) I, II and III
D) I, II and IV

Question

Quizplus · Accepted Answer

Physical capital refers to tangible assets used in the production of goods and services, such as machinery, buildings, and vehicles. The Taco Bell store (II) and the rental cars owned by Hertz Rental-A-Car (III) are examples of physical capital. Shares of Ford stock (I) and salaries paid to Intel executives (IV) are financial assets and compensation, respectively, not physical capital.

Which of the Following Items Are Considered Physical Capital