Capital – Core Concepts

Definition of Capital

  • Refers to tools, machines, buildings, and other man-made resources used in production

Key Functions of Capital

  • Increases Productivity\textbf{Increases Productivity}: Tools & machines allow more output per worker
  • Enables Specialisation\textbf{Enables Specialisation}: Workers focus on one task/product, trade excess for profit
  • Facilitates Difficult Tasks\textbf{Facilitates Difficult Tasks}: Machinery performs work humans alone cannot (e.g., underground mining)
  • Supports Mass Production\textbf{Supports Mass Production}: Large quantities of goods can be produced efficiently