Which economic principle establishes that all production activities use tangible assets?

The correct answer is rooted in the concept of capital goods, which are fundamental to the production process in economics. Capital goods refer to physical assets that a company utilizes in the process of producing its products and services. These tangible assets include machinery, buildings, tools, and equipment that help bring a product to market.

The notion that all production activities use tangible assets underscores the importance of having the right physical resources to create goods or services. Without these capital goods, the production of items would not be feasible, as they constitute the essential foundation upon which the production process operates.

Human capital, while also important, pertains to the skills and knowledge of the workforce rather than the physical assets directly involved in production. The price system relates to how prices are determined in markets and how they signal information to consumers and producers. Consumer sovereignty refers to the idea that consumer preferences dictate what goods and services are produced. Each of these concepts plays a key role in economics, but they do not directly establish the link between production and tangible assets in the same way that capital goods do.