Question

question 21

sam is establishing a new bakery. she purchases an industrial oven, display counters, and mixers to facilitate her daily work.

among these, which is an example of a physical capital item?

staff skills
industrial oven
flour and sugar
cash in the bank

Explanation:

Define physical capital

Using the Factors of Production knowledge point

Physical capital refers to man-made, tangible assets used in the production process to create goods or services, such as machinery, buildings, and equipment.

Evaluate the given options

• Staff skills: Represents human capital (knowledge, experience, and skills of employees).
• Industrial oven: A man-made, durable piece of equipment used to bake goods, which is a clear example of physical capital.
• Flour and sugar: Represent raw materials or intermediate goods (circulating capital/inputs), not fixed physical capital.
• Cash in the bank: Represents financial capital, which is used to acquire physical assets but is not physical capital itself.

Answer:

• Staff skills
• Industrial oven (Correct answer)
• Flour and sugar
• Cash in the bank