Which of the following is not fixed capital?a)Agricultural landb)Tubewellc)Fertilisers and pesticidesd)Farm machineryCorrect answer is option 'C'. Can you explain this answer?

Question

Answer

C)Fertilisers and pesticides
Explanation: Fertilizers and pesticides contain chemicals. Excess amount of these chemicals in the soil are harmful to microorganisms like bacteria, as a result of which they die. ... Because of their addition, soil fertility may get increased for a short time period, but in a long run they make the land barren.

Answer

Fertiliser and pesticides are used in to protect the crops from harmful insects. It is not a capital requirement for agriculture it is a not fixed capital in nature.

Answer

Option c

Answer

Fixed capital refers to assets that are used in production and have a long-term value. These assets are not consumed in the production process but rather contribute to the production process over an extended period of time.

Let's analyze each option to determine if it qualifies as fixed capital:

a) Agricultural land: Agricultural land is considered fixed capital because it has a long-term value and is used in the production of agricultural goods. It provides a location for farming activities and contributes to the output of crops or livestock.

b) Tubewell: A tubewell is a device used for extracting groundwater for irrigation purposes. It is also considered fixed capital as it contributes to the production process over a long period of time. The tubewell is a durable asset that enhances agricultural productivity by providing a reliable water source.

c) Fertilisers and pesticides: Fertilisers and pesticides are not considered fixed capital. They are classified as circulating capital because they are consumed or used up in the production process. Fertilisers and pesticides are applied to the agricultural land to enhance crop growth and protect against pests. However, they are not long-lasting assets and need to be replenished regularly.

d) Farm machinery: Farm machinery, such as tractors, harvesters, and irrigation equipment, is an example of fixed capital. These machines are durable assets that are used over a long period of time to enhance productivity in agriculture. They contribute to the production process by mechanizing various tasks and increasing efficiency.

In conclusion, the correct answer is option c) Fertilisers and pesticides. Unlike agricultural land, tubewells, and farm machinery, fertilisers and pesticides are not fixed capital as they are consumed in the production process and need to be replenished regularly.

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