EBK PRINCIPLES OF MICROECONOMICS
EBK PRINCIPLES OF MICROECONOMICS
11th Edition
ISBN: 8220100792908
Author: Fair
Publisher: YUZU
Question
Chapter 11, Problem 1P

(a)

To determine

Video poker game and the capital.

(a)

Expert Solution
Check Mark

Explanation of Solution

The capital can be a large sum of money or any other commodity that can be used to produce other goods and services for the economy. The video poker game provides the entertainment, whereas the item provides and generates income to those who install it. Thus, it is capable of creating income for the future. Thus, it is a capital.

Economics Concept Introduction

Capital: The capital is the large sum of money or any intermediary good that can be used as intermediaries to make other goods and services.

(b)

To determine

Capital and non capital: A $10 bill.

(b)

Expert Solution
Check Mark

Explanation of Solution

The $10 bill provides means to purchase other commodities. But it is not an intermediate commodity. It is a final commodity with which anything can be purchased or sold in the economy. Thus, it is not an investment and not capital in that sense.

(c)

To determine

Capital and non capital: College education.

(c)

Expert Solution
Check Mark

Explanation of Solution

College education helps to convert the individual into a productive labor. It helps to acquire skills and helps the individual to attain a good job and better living standards. Thus, it is considered as capital and especially human capital.

(d)

To determine

Capital and non-capital: Golden gate bridge.

(d)

Expert Solution
Check Mark

Explanation of Solution

The golden gate bridge helps to connect between the two places. It, thus, enables the transport and communication and helps to the faster economic growth. Thus, it is a capital. Since it is on the infrastructure and for the society, it is social infrastructural capital.

(e)

To determine

Capital and non-capital: Shirt on the rack at sears.

(e)

Expert Solution
Check Mark

Explanation of Solution

The shirt is a tangible commodity, and it provides income to the seller, which means the shirt is in terms a capital for the seller. It is a tangible capital of the seller.

(f)

To determine

Capital and non-capital: A government bond.

(f)

Expert Solution
Check Mark

Explanation of Solution

The government bond is an interest yielding money market instrument. The bond is not considered as a capital because it is financial instruments, which are usually not considered as capital.

(g)

To determine

Capital and non-capital: Empire state building.

(g)

Expert Solution
Check Mark

Explanation of Solution

The state building provides the office spaces for many of the firms and companies to operate in the economy, which facilitates the economic growth and development. Thus, it is a capital and since the buildings come under the tangibles, it is a tangible capital.

(h)

To determine

Capital and non-capital: Savings account.

(h)

Expert Solution
Check Mark

Explanation of Solution

The savings account is an account kept in a bank, which stores the money of the individual. It can be withdrawn at any point of time according to the wish of the depositor. Thus, it is a financial instrument, which is not usually considered as a capital.

(i)

To determine

Capital and non-capital: Washington monument.

(i)

Expert Solution
Check Mark

Explanation of Solution

The Washington monument is the tallest building in the DC. It facilitates the trade and commerce of the economy. Thus, it is considered as the infrastructural capital of the economy.

(j)

To determine

Capital and non-capital: A Honda plant.

(j)

Expert Solution
Check Mark

Explanation of Solution

The plant uses the inputs to make the final vehicles with the help of the machinery present inside the plant. Thus, it helps to produce a large quantity of output to the firm. Thus, it comes under the category of tangible capital of the firm.

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