Define the following terms:
a. human capital
b. investment
c. capital formation
d. property rights
What will be an ideal response?
a. Human capital is the amount of skill embodied in the workforce. It is most commonly measured by the amount of education and training.b. Investment is the flow of resources into the production of new capital. It is the labor, steel, and other inputs devoted to the construction of factories, warehouses, railroads, and other pieces of capital during some period of time.c. Capital formation is synonymous with investment. It refers to the process of building up the capital stock.d. Property rights are laws and/or conventions that assign owners the rights to use their property as they see fit (within the law), for example, to sell the property and to reap the benefits (such as rents or dividends) while they own it.
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A common resource is used efficiently if marginal social benefit equals marginal social cost
Indicate whether the statement is true or false
Positive marginal utility implies increasing total utility
a. True b. False
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Answer the following statement true (T) or false (F)