Physical Capital is one of the four essential requirements for the production of goods and services. It is broadly categorized into two distinct types: Fixed Capital and Working Capital.

Pair 1 is incorrectly matched: A Farmer’s plough is a durable tool that can be used in production over many years. Tools, machines, and buildings that are used across multiple production cycles for a long duration are classified as Fixed Capital.

Pair 2 is correctly matched: A Computer is a high-value technological machine used in offices or industrial setups. Since it provides a service over a long period and is not consumed in a single use, it is a form of Fixed Capital.

Pair 3 is incorrectly matched: Yarn used by a weaver is a raw material that is transformed or exhausted during a single production process. Raw materials and money in hand, which are used up and require frequent replenishment, are classified as Working Capital.

Pair 4 is correctly matched: Petrol is a consumable fuel required for the daily operation of machinery and transport. Because it is a * requirement that is consumed during the process and does not create a long-term asset, it falls under the category of Working Capital.