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?multiple choicea meat slicer to cut ham for sandwichesa new idea that automates the making of sandwichesan additional workerham for the sandwiches
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?multiple choicea meat slicer to cut ham for sandwichesa new idea that automates the making of sandwichesan additional workerham for the sandwiches
Solution
The correct answer is "a meat slicer to cut ham for sandwiches". In economics, capital refers to the assets a business uses to produce goods or services. These assets can be physical, like machinery and equipment, or financial, like money used to buy these assets. In this case, the meat slicer is a piece of equipment that Bob uses to produce sandwiches, so it is considered capital. The other options are not examples of capital. A new idea is an example of innovation, not capital. An additional worker is considered labor, not capital. And ham for the sandwiches is a raw material, not capital.
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