Question

4. The difference between capital goods and material inputs is that:

1. Capital goods are durable; Materials are used up
2. Capital goods become physically part of the output produced; Materials do not
3. Capital goods are machinery; Materials are everything else
4. Capital goods are bough on credit; Materials are paid for in cash

5. The amount of output required for consumption by producers at their customary standard of living, plus the amount required to replace capital depreciation and material inputs, is referred to as:

1. Surplus product
2. Net product
3. Total product
4. Necessary product

7. The amount of output allocated towards the consumption of producers at their customary standard of living, plus the surplus product is referred to as:

1. Net product
2. Necessary product
3. Total product
4. Household product

8. An economic system in which a political elite claims the surplus product by taxing farmers and tenants is know as

1. Independent production
2. Central planning
3. Feudalism
4. Agrarian despotism

Answer 1

Capital goods are those goods which are durable and can last for many periods of production. They are not used up in one period of their use. They can be used in many production periods.

Material inputs on the other hand are those goods which are not durable and which are used up(finished) in the process of production in the the period in which they are used.

Capital goods do not become physically part of the output produced. It is the materials which become part of the output produced physically. Thus, Option B is Incorrect.

Moreover capital goods are not machinery only. Many Other goods can also be called capital goods such as building etc. Option C is incorrect

This is also not true that capital goods are bought on credit and materials are paid for in cash. Materials can also be bought for credit. Thus, Option D is incorrect.

show the main difference between capital goods and material inputs is that capital goods are durable ; materials are used up.

Therefore, Option A is correct.