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 encompasses man-made production goods: machinery, tools, buildings, and infrastructure. Key attributes of physical capital include:
Tangibility: Physical capital is tangible, allowing for physical interaction and observation.
Tradability: Physical capital is generally tradable (can be bought or sold), though some infrastructure may have restricted trade. This is typically a characteristic.
Immobility: This is not a core feature. Physical capital, like machines, is often relocatable. Immobility is primarily linked to land (a natural resource), not physical capital.
Consequently, excluding immobility as a feature, option (B) (ii) and (iii) is logical. However, depending on context, the tradability aspect may be debated (in certain cases), potentially making (C) or (D) defensible based on interpretation.