Choose whether the given statement is True/False:

Villagers taking the initiative of setting up a technologically inclined unit, say, a computer class centre require more fixed capital.

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True

False

answer is A.

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Detailed Solution

The above statement is true.
The assets required to start and run a firm that is not used up or destroyed during the creation of a good or service are referred to as fixed capital.
Both instances of a small manufacturing unit, such as a sugarcane crushing unit and a computer class centre, have fixed capital in the form of machines. However, setting up a computer class centre requires a larger fixed capital due to the presence of assets in the form of computers, which are more expensive than the sugarcane crushing machine. In contrast to the owner of a sugarcane crushing machine, who just needs primarily unskilled labour, the owner of the computer school is required to hire trained and qualified computer teachers.

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