Which of the following is an example of capital?

• A. Land
• B. Machinery
• C. Workers
• D. Entrepreneurship

Answer: (B)

Capital means man-made inputs used in the production process to produce goods and services. Machinery fits this because it is a man-made, durable input that businesses use over time to increase output. It’s not land, which is a natural resource; not workers, who provide labor; and not entrepreneurship, which is the act of organizing and taking risks. So machinery is the best example of capital.