Question

What is physical capital? What are the two types of physical capital? Write the main feature of each with example.​

Answer 1

Answer:

Physical capital refers to assets, such as building, machinery, and vehicles, which are owned and employed by an organisation. Physical capital constitutes one of the factors of production other than land and labour.

Physical capital is of two types:

Fixed capital calls for one time investment and can be used for long time period. Working capital refers to that physical capital that is used during one production cycle and then needs to be procured again for the next production cycle

In economic theory, physical capital is one of the three primary factors of production, also known as inputs production function. Physical capital is divided into two types they are: I) Working Capital : Raw materials and money at hand are called working capital. II) Fixed Capital: Tools, machines and building etc

Explanation:

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Answer 2

In economics, 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 of the three primary factors of production, also known as inputs production function.

Physical capital is divided into two types they are:

I) Working Capital :

Working capital refers to that physical capital that is used during one production cycle and then needs to be procured again for the next production cycle. Ex : Raw materials and money at hand are called working capital.

II) Fixed Capital:

Fixed capital calls for one time investment and can be used for long time period. Ex: Tools, machines and building etc. are called Fixed Capitals.

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