A plow used to prepare soil for planting is an example of physical capital (capital resources).
The factors of production can be defined as the fundamental building blocks used by an individual or business firms for the manufacturing of finished goods and services in order to meet the unending needs, wants and requirements of consumers.
In Economics, there are four (4) factors of production and these include;
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Land: it refers to the natural resources and raw materials extracted from the ground or grown in the soil e.g oil, gold, rubber, cocoa, etc.
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Labor (working): this is the human capital or both skilled and unskilled workers who are saddled with the responsibility of overseeing and managing all the aspects of production.
- Entrepreneurship: it is the intellectual capacity required to drive a business and the skills to develop an idea into a money making venture (business).
- Physical capital (capital resources): it includes the physical assets used for the production of goods and services such as equipment, money, plant, buildings, tools, machinery, etc.
Basically, the physical capital comprises man-made, tangible physical assets such as tools or equipment that are purchased or invested in by a business firm to use in the production of goods or services. Some examples of physical capital are computer, machines, tractor, hammer, vehicle, storage tank, plow, etc.
Hence, a plow used to prepare soil for planting is considered to be an example of a physical capital because it is a tangible, man-made asset.
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