Question

Identify, which of the following is not a feature of physical capital. (Choose the correct option)
(i) Tangibility
(ii) Tradability
(iii) Immobility

• A. (i) and (ii)
• B. (ii) and (iii)
• C. (i) and (iii)
• D. (i), (ii), and (iii)

Hint:

Physical capital is tangible and generally tradable. Immobility is not its feature—it's more applicable to land or natural resources.

Answer 1

The Correct Option is B

Physical capital refers to man-made goods used in the production process, such as machinery, tools, buildings, and infrastructure. The features of physical capital are:
Tangibility: Physical capital is tangible, meaning it can be touched and seen. This is a valid feature of physical capital.
Tradability: Physical capital can generally be traded (sold or purchased), although some assets like infrastructure might have limited tradability. Still, tradability is usually considered a characteristic of physical capital.
Immobility: This is not a defining feature. Physical capital such as machines and equipment can often be relocated. Immobility is typically associated with land (a natural resource), not physical capital.
Therefore, if we consider immobility as not a feature, then option (B) (ii) and (iii) makes sense. However, some contexts may question tradability (in limited cases), making (C) or (D) also arguable based on nuanced interpretations.