Question

Bob, the owner of a local deli in town, needs to purchase something that economists would label as "capital" to help him produce sandwiches. Which of the following is an example of capital?

Answer 1

These are the options for the question:

Ham for the sandwiches

An additional worker

A new idea that automates the making of sandwiches

A meat slicer to cut ham for sandwiches

And this is the correct answer:

A meat slicer to cut ham for sandwiches

Step-by-step explanation:

Capital is defined as assets that can improve the economic standing of the business. In this case, a meat slicer is an asset that increases productivity because it cuts ham faster than a human. This will mean that now the Deli will be able to produce more sandwiches, sell more, and improve profits.

An additional worker is incorrect because it would be labor.

A new idea is intellectual capital, but it has to be materialized to be accounted.

And the ham is a raw material that by itself does not necessarily improve the company's production.