Question

Human capital refers to which of the following?

A)manufactured goods that are used to produce other goods and services
B)the quantity of goods and services that can be produced by one worker or by one hour of work
C)the accumulated knowledge and skills workers acquire from education and training or from their life experiences
D)physical equipment that is made by human laborers, not machines

Answer 1

Human capital represents the accumulated knowledge, skills, and health that workers gain, influencing their productivity and economic value. It includes both formal education and informal life experiences. Human capital is a key determinant in individual earnings and overall economic growth.

Step-by-step explanation:

Human capital refers to the accumulated knowledge, skills, and expertise that workers gain from education and training, as well as from their life experiences. This concept is critical in understanding labor productivity as it represents the quality of labor rather than just the quantity. For example, an increase in education can lead workers to become more productive and thereby command higher wages. Such was the case in Guatemala, where children who received nutritional supplements ultimately became more productive adults, indicative of an investment in their human capital.

In essence, human capital encompasses not just formal education, but also the informal learning and skills development that take place over a person's lifetime. It is one of the main drivers of economic growth and individual prosperity. When workers invest in their human capital through education and health, they are generally able to transform their time into more valuable production, thus boosting their potential in the job market.