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Human Capital and Opportunity Cost

Human Capital and Opportunity Cost. HUMAN CAPITAL. Knowledge and skills, and health that individuals possess. With improved human capital, people can produce more and better products than other people can – in the same amount of time or less. Opportunity Cost.

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Human Capital and Opportunity Cost

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  1. Human Capital and Opportunity Cost

  2. HUMAN CAPITAL • Knowledge and skills, and health that individuals possess. • With improved human capital, people can produce more and better products than other people can – in the same amount of time or less

  3. Opportunity Cost • The alternative that is given up when making a decision • What are the opportunity costs of going to college? • Income that could have been made otherwise • Why would you choose to forgo giving up income and instead becoming a full-time student in college? • To develop human capital in order to obtain higher levels of income in the future

  4. Examples • Joe has a huge test on Monday. On Sunday afternoon, he accepts an invitation to go to a movie with this friends. What is his opportunity cost? • Mariah skips class. What is her opportunity cost?

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