P.E.=mgh P.E.= mass×gravity×height, therefore 4kg×10×0= 0 J K.E. is also equal to 0 because the block is not moving, is in the state of Inertia

Well, there you have a very important principle wrapped up in that question. There's actually no such thing as a real, actual amount of potential energy. There's only potential relative to some place. It's the work you have to do to lift the object from that reference place to wherever it is now. It's also the kinetic energy the object would have if it fell down to the reference place from where it is now. Here's the formula for potential energy: PE = (mass) x (gravity) x (height) . So naturally, when you use that formula, you need to decide "height above what ?" If you're reading a book while you're flying in a passenger jet, the book's PE is (M x G x 0 meters) relative to your lap, (M x G x 1 meter) relative to the floor of the plane, (M x G x 10,000 meters) relative to the ground, and maybe (M x G x 25,000 meters) relative to the bottom of the ocean. Let's say that gravity is 9.8 m/s² . Then a 4kg block sitting on the floor has (39.2 x 0 meters) PE relative to the floor it's sitting on, also (39.2 x 3 meters) relative to the floor that's one floor downstairs, also (39.2 x 30 meters) relative to 10 floors downstairs, and if it's on the top floor of the Amoco/Aon Center in Chicago, maybe (39.2 x 345 meters) relative to the floor in the coffee shop that's off the lobby on the ground floor.