Youre currently subscribed to some eWEEK features and just need to create a username and password. In economics, physical capital or just capital is a factor of production or input into the process of production, consisting of machinery, buildings, computers, and the like. The production function takes the general form YfK, L, where Y is the amount of output produced, K is the amount of capital stock used and L is the amount of labor used. In economic theory, physical capital is one of the three primary factors of production, also known as inputs in the production function. The others are natural resources including land, and labor the stock of competences embodied in the labor force. Physical is used to distinguish physical capital from human capital a result of investment in the human agent, circulating capital, and financial capital. Physical capital is fixed capital, any kind of real physical asset that is not used up in the production of a product. Usually the value of land is not included in physical capital as it is not a reproducible product of human activity. Capital. Lyberty. Yes, a splash page is old fashioned, but its been a tradition here since 1999. Installing Linoleum Flooring Over Existing Linoleum Block. Home Adam smith capital asset depreciation durable economics s nonrenewable resource physical capital production service stock.