Which one of the following is most likely to be a capital good for a small firm producing fruit juice? A a delivery van B bottles of juice bought by consume...

Assessment: Economics 9214 | Paper 1 Mock 01 | Written Paper 1 Subject: Economics - 9214

Question 1 Report

Which one of the following is most likely to be a capital good for a small firm producing fruit juice?
A a delivery van
B bottles of juice bought by consumers
C wages paid to workers
D oranges used in production

(a) State the correct answer. [1]

Answer Details

(a) A capital good is a man-made asset used by a business to help produce or deliver goods and services. A delivery van helps the fruit-juice firm transport its products, so it is capital. [1]

Oranges are a raw material, workers' wages are a payment to labour, and bottles of juice bought by consumers are finished consumer goods rather than capital goods.

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