Question

What is meant by physical capital? Give examples. What are the items coming under it?

Answer 1

Physical capital includes the variety of inputs required at every stage during production such as
(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.
(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. Money is also needed to make payments and buy necessary items.