Farmer’s plough is an example of which factor of production?
(a) Natural resource
(b) Fixed physical capital
(c) Human capital
(d) Variable capital
Answer:
So, the correct answer is (b).
Explanation:
- Tools and machine range from simple tools such as the farmer’s plough to sophisticated machines such as generators, turbines, computers, etc.
- Tools, machines, and buildings can be used in production over many years , and are called fixed capital.
Let’s check all the options
- (a) Natural resource- Natural resources are resources that are drawn from nature and used with few modifications.
- (b) Fixed physical capital- Tools, machines, and buildings can be used in production over many years , and are called fixed capital.
- (c) Human capital- Knowledge and enterprise to put together land, labor, and physical capital and produce an output. It is called human capital.
- (d) Variable capital- Variable capital means the proportion of capital that is invested in wages, and in the purchase of labor-power.
Since farmers' plough can be used for production over many years , it is a f ixed physical capital . Thus, option (b) is correct.
