Question

what is physical capital?what are its different types explain each

Answer 1

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WHAT IS PHYSICAL CAPITAL:

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Physical capital refers to a factor of production (or input into the process of production), such as machinery, buildings, or computers. In economic theory, physical capital is one the three primary factors of production, also known as inputs production function.

TYPES OF PHYSICAL CAPITAL:

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The 6 Kinds of Capital Your Business Can't Survive Without

• Internal economic capital. This includes financial capital,and non-financial capital.
• External economic capital.
• Natural capital.
• Human capital.
• Social and relationship capital.
• Constructed capital.

EXPLANATION OF THE TYPES:

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In economics, physical capital or just capital is a factor of production, consisting of machinery, buildings, computers,etc . Its is divided into 2 categories-working and fixed capital.The production function takes the general form Y=f(K, L, N), where Y is the amount of output produced, K is the amount of capital stock used, L is the amount of labor used, and N is the amount of natural resources used.

In economic theory, physical capital is one of the three primary factors of production; the others are natural resources (including land), and labor—the stock of competences embodied in the labor force. Physical capital is distinct from human capital (a result of investment in the human agent), circulating capital, and financial capital.

Physical capital is fixed capital, which is any kind of real physical asset that is not used up in the production of a product. Usually the value of land is not included in physical capital as it is not a reproducible product of human activities.

EXAMPLES :

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• Buildings.
• machinery.
• vehicles.
• computers.
• Cash.
• real estate.
• equipment.

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