With reference to physical capital in Indian economy, consider the following pairs : Items : Category 1. Farmer's plough : Working capital 2. Computer : Fixed capital 3. Yarn used by the weaver : Fixed capital 4. Petrol : Working capital How many of the above pairs are correctly matched ?
A
Only one
B
Only two
Correct Answer
C
Only three
D
All four
Explanation
Option (B) is correct because only two pairs—Computer (Fixed Capital) and Petrol (Working Capital)—are accurately matched based on the core concept of **Physical Capital** classification. Fixed Capital refers to durable assets like tools and machinery used in production over many years, whereas Working Capital includes raw materials and fuel that are consumed within a single production cycle. Pairs 1 and 3 are incorrectly matched because a farmer's plough is a durable tool (Fixed Capital) and yarn is a raw material used up during the weaving process (Working Capital).
MicroeconomicsFactors of ProductionPhysical capitalWorking capitalFixed capitalFarmer's ploughComputerYarnPetrol