Items - Category
1. Farmer’s plough -
Working capital
2. Computer -
Fixed capital
3. Yarn used by the weaver -
Fixed capital
4. Petrol
- Working capital
How
many of the above pairs are correctly matched?
(a). Only one
(b). Only two
(c). Only three
(d). All four
Explanation:
Farmer’s plough - Working capital:
Incorrect. A plough is a durable asset used repeatedly, so it's fixed capital.
Computer - Fixed capital: Correct. A
computer is a durable asset used for a long time in production.
Yarn used by the weaver - Fixed capital:
Incorrect. Yarn is a raw material consumed in the production process, so it's
working capital.
Petrol - Working capital: Correct. Petrol
is consumed during the production process and needs to be replenished regularly
Only
two pairs (Computer - Fixed capital and Petrol - Working capital) are
correctly matched.