Praxis 5004 Practice Test Practice Question
An entrepreneur wants to start a business to make and sell clothing. Which of the following is a capital resource that the entrepreneur would need?
Correct Answer: D
Rationale: In starting a clothing business, capital resources are essential for production. Machinery (D) is a capital resource because it directly contributes to the manufacturing process, enabling the entrepreneur to produce clothing efficiently.
Cotton (A) and wool (B) are raw materials, not capital resources, as they are inputs used in production rather than tools or equipment. Employees (C) represent labor, which is a separate factor of production. While all options are important for a business, only machinery qualifies as a capital resource necessary for creating the clothing.
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