Capital Is a Factor of Production

question 52

Multiple Choice

Capital is a factor of production. Which of the following is an example of capital?
i) $1,000 in money
Ii) 100 shares of Microsoft stock
Iii) $10,000 in bonds issued by General Motors
Iv) A drill press in your local engineering firm

• A) i and ii
• B) ii only
• C) iii only
• D) iv only
• E) ii and iii

---

Definitions:

Corn Industry

The sector of the economy involved in the production, processing, and distribution of corn and corn-related products.

Excess Profits

Profits that exceed the normal expected return on investment, often occurring in industries with little to no competition.

Perfectly Competitive Industry

An industry structure where many firms sell identical products, entry and exit are easy, and no single seller controls the market price.

Market Price

The price at which a good or service can be bought or sold in a marketplace, determined by supply and demand.