Question

Mishrilal has purchased a mechanical sugarcane crushing machine run on electricity and has set it up on his field. Which physical capital does sugarcane crushing machine come under?​

Answer 1

(a) Tools, machines, buildings: Tools and machines range from very simple tools such as a farmer’s plough to sophisticated machines such as generators, turbines, computers, etc. Tools, machines, building can be used in production over many years.

(b) Raw materials and money in hand: Production requires a variety of raw materials such as the yarn used by the weaver and the clay used by the potter. Also, some money is always required during production to make payments and buy other necessary items. Raw materials and money in hand are called working capital.

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