Check sibling questions

What is Capital?

It is the amount of money invested into business

 

What are Different types of Capital

In Economics,it is of 2 types

Physical Capital

Human Capital

Lets understand this with the help of an example

Introduction-What is Human and Physical Capital - Teachoo.JPG

Difference between Human Capital and Physical Capital - Teachoo.JPG

Difference Between Human Capital and Physical Capital

 

What we will Study in this Chapter

We will study about only

Human Capital

What is Human Capital?

It is the skills and knowledge possed by a population which provides economic value of country

 

 

Important Points

Human Capital is Intangible

(It does not have any physical form, it is in the mind of owner)

Human Capital is not sold in market

(Only services of human capital are sold)

Human Capital benefits not only person but also the society

(An educated person maintains good health and hygiene and takes part in democratic process of country)

Human Capital is not completely mobile

(It is because movement of people is restricted)

Human Capital also depreciates with time

(Depreciation takes place by ageing of a person but can be reduced by keeping person updated)

 

Note

The 7th five year recognised the importance of Human Capital

 

MCQ Other Books

Q1

In the following questions, select the correct answers:

1 ____ five year plan recognised the importance of Human Capital.

A Seventh

B Third

C Eigth

D Sixth

View Answer

 

Q2

Which of the following is an example of physical capital?

A Machinery

B Health of People

C Building

D Education and knowledge of people

View Answer

 

Q3

____ refers to the stock of skill, ability, expertise, education and knowledge embodied in the people

A Human resource

B Physical Capital

C Human Capital

D None of these

View Answer

 

Q1

Active factor in production is:

A Physical Capital

B Human Capital

C Both (A) and (B)

D None of the above

View Answer

 

Q2

In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R).

1 Assertion (A): Physical capital helps in formation of human capital.

Reason (R): Physical capital is passive in nature.

Mark the correct choice:

A Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

B Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).

C Assertion (A) is true, but Reason (R) is false.

D Assertion (A) is false, but Reason (R) is true.

View Answer

What is Human Capital of an Economy - Teachoo.JPG

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Transcript

Introduction-What is Human and Physical Capital Suppose a person starts a new business and invests Rs 60,00,000 as follows Building 50 lacs Machinery 8 lacs Employee Training 2 lacs Total 60 Lacs What is Capital of a Business? It is amount invested into business to produce goods and service It is Rs 60 lacs What is Physical Capital? It is Investment in Tangible Assets (which can be seen) It is Rs 50 Lacs+8 Lacs=58 Lacs What is Human Capital? It is the stock of skills and knowledge (which cannot be seen) It is Rs 2 lacs Difference between Human Capital and Physical Capital Physical Capital It is stock of manmade goods like Machinery ,building etc It is Tangible (Example-Machine can be Seen & touched) Can be sold (Example-Machine can be sold) Completely Mobile (Can be transferred from one place to another) Separable from Owner (Machine and Person owning machine different) Depreciate More (Machine becomes old and useless after some time) Creates Only Private benefit (Only benefit to person owning Machine) Human Capital It is the Stock of Skills and knowledge possessed by population of an economy It is Intangible (Cant be seen or touched) Not sold in Market (knowledge cant be sold, Products and service using this knowledge sold) Not Completely Mobile Restriction on Movement of People Inseparable from Owner (Knowledge & Person having knowledge same) Depreciate Less (Knowledge becomes outdated after some time,can be updated) Both Private and Social Benefit (Knowledge benefits person as well as society) What is Human Capital of an Economy? It is the skills and knowledge possessed by a population which provides economic value of country HUMAN CAPITAL Human Beings Skills & Knowledge Provide Economic Value to Economy Important Points of Human Capital Intangible Knowledge Can't be seen or touched Can't be sold Knowledge cant be sold or transferred From one place to another Benefits the society Benefits to Person as well as Society Not completely Mobile Restriction on Movement of person From One place to another Depreciates with Time Knowledge becomes obsolete with age but can be updated

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