Answer:
(i) Physical capital: Physical capital is the variety of
inputs required at every stage during production. It includes fixed capital and
working capital.
(ii)
Fixed capital: Tools and machines range from a plough to a tractor and
sophisticated machines like generators, turbines, computers, etc. The tools,
machines, buildings which can be used in production over many years are called
fixed capital.
(iii)
Working capital: Production requires a variety of raw materials. It requires money
to make payments and buy other necessary items. Raw materials and money in hand
are called working capital. Unlike tools and machines, these are used up in
production.
For
example. Yarn required by a weaver; clay used by a potter.
(iv)
Human capital: One needs knowledge and enterprise to be able to put together
land, labour and physical capital and produce an output; either to use it by
oneself or to sell in the market. This is known as human capital, which enables
better production with human skill and knowledge.
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