Question

The human capital model assumes that

	a.	education is a productive investment that raises total output.
	b.	education does not change potential productivity, but it does save resources by reducing sorting costs for employers.
	c.	the educational system is a very expensive process to legitimize the intergenerational transmission of privileged status.
	d.	such factors as the love of learning should be included in the analysis.

Answer 1

Answer

Option a

education is a productive investment that raises total output

A human capital assumes education is a productive investment because it provides better returns than low-education as it depends on the market value of the skills but as per assumption, it counted as productive investment.