Physical and human capital investments are
a. different in that the opportunity for economic profit is present for physical capital but not for human capital investments.
b. different in that human capital decisions do not involve future income considerations, while physical capital investments do.
c. similar in that nonmonetary considerations play an equally important role in both.
d. similar in that both involve forgoing current income (and consumption) in an effort to achieve higher future income (and consumption).
D
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In the presence of compensating wage differentials, explain why the consumption possibility frontier is not a good approximation of the utility possibility frontier.
What will be an ideal response?
A cable television broadcast of a movie is
a. excludable and rival in consumption. b. excludable and not rival in consumption. c. not excludable and rival in consumption. d. not excludable and not rival in consumption.
The ______________ level of production occurs when the externality is fully internalized and can be _____________ over time as we develop better pollution control technologies.
a. minimum; increased b. minimum; reduced c. optimal; increased d. optimal; reduced e. market; reduced
Suppose a regression with 51 observations returns a regression sum of squares of 56,000 and a total sum of squares of 250,000. The corresponding R2 is:
A. 0.671. B. 0.224. C. 0.345. D. 0.776.