Investment in human capital is very similar to investing in physical capital. True or false? Explain your answer
What will be an ideal response?
They are similar in the sense that rates of return can be calculated for each form of capital so one can compare these and make a choice as to which type of investment to undertake. Rates of return to education are provided in Table 8.1 . Of course, there is a market for physical capital where it can be bought/sold but no market for human capital.
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Consider the following:
(i) Can a good have both a downward-sloping Engel curve and a downward-sloping demand curve? Why or why not? (ii) Can a good have both an upward-sloping Engel curve and an upward-sloping demand curve? Why or why not?
Which of the following is true
a. Increasing output always leads to increase in profits b. Increasing outputs increase profits if price is above marginal cost c. Increasing output increases profits if price is lea than marginal costs d. Increasing output always decreases profits
The concept of loss aversion is:
A. preferring certain outcomes over uncertain ones. B. a general tendency for people to put more effort into achieving gains than avoiding losses. C. a general tendency for people to put more effort into avoiding losses than achieving gains. D. a spectrum of tolerance for risky situations.
The maximum potential money multiplier is equal to
A. the inverse of the required reserve ratio. B. the number of dollars on reserve. C. one minus the reserve ratio D. the reserve ratio.