Question

Which of the following is an example of physical capital?

a. bulldozers, backhoes and other construction equipment

b. a taxi-cab driver's knowledge of the fastest routes to take

c. the available knowledge on how to make semiconductors

d. All of the above are correct.

Answer 1

The answer to this is A.

Physical capital is part of the production process, what economists call a factor of production. It includes things like buildings, machinery, equipment and computers.