Human Capital and Labour: Assignment
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Added on 2020-03-16
Human Capital and Labour: Assignment
Added on 2020-03-16
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ContentsPart A...........................................................................................................................................................3Part B...........................................................................................................................................................3Bibliography................................................................................................................................................6
Part A1)Key Differences between Human Capital and LabourPhysical capital is generally subject to diminishing returns while human capital is subject to increasing returns.It is difficult to improve the efficiency or production capacity of per unit of physical capital. The efficiency of human capital can be increased with investments in skills of thecapital.Overall, human capital cannot be said to be subject to depreciation.Labour is a generally a term that does not include any qualitative attributes. For example, while referring to labour, the terms manhours and units produced are used. Human Capital a term that often encompasses the qualitative and quantitative terms attributes of labor, for example, to measure human capital , the terms ability, efficiency as well as units of goods produced are used.[ CITATION Gan141 \l 1033 ]2)Diminishing Returns causes growth to slow down as the GDP increases. For example, an advanced country such as USA experiences slower growth than a country like India. As more and more capital gets accumulated, the benefits derived from that capital become lower and lower. The productivity of any capital is not infinite. As the productivity of any capital reaches its highest potential, the returns begin to grow at a lower rate. For example, the productivity of human capital can be measured in the number of units produced per hourare used. However, there may be a limit to the number of units per unit of labour can produce, regardless of their efficiency. Similarly, countries have limited natural resources which puts a ceiling to their growth rate.[ CITATION Gan141 \l 1033 ][ CITATION Sam04 \l 1033 ]3)True. GDP per capita refers to the total nominal GDP of the economy divided by the total number of people.[ CITATION Sam04 \l 1033 ] Given the increasing returns to scale, the GDP will simply be on a higher curve. However, the GDP will also be divided among the increased factors of production. For the GDP per capital to change, efficiency per capita factor of production must change.4)Option d) would be the right answer. Productivity is measured as an increase in the number of units relative to a fixed unit of measurement. Since all other factors remain constant, Productivity would have to increase for the output to increase.Part B5)A) The fact that most countries will transition to developed economies provided they improve the health care is surprising. The importance of health quality came as a surprise.
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