COLEGIO DE LA PURISIMA CONCEPCION

The School of the Archdiocese of Capiz

Roxas City

College of Business, Management and Accountancy

BA 1 – BASIC MICROECONOMICS
First Semester 2020-2021

Name: LIRA S. BALASABAS

Activity 11

1. In what sense is education a type of capital?

ANSWER: Human capital is accumulation of investments in people. Most
important human capital is education. Like all human capital education
represents an expenditure of resources at one time to raise productivity in the
future. But unlike an investment in other forms of capital, education is tied to a
specific person, and this makes it human capital.

2. How might education raise a worker’s wage without raising the worker’s
productivity?
ANSWER: Some economists have argued that education leads to workers earning
higher wages not because of increase in productivity but because workers with
high natural ability use education as a way to signal their high ability to
employers.

3. How do wages compensate for differences in job characteristics?

ANSWER: Wage differences compensate workers for job attributes: The harder or
less pleasant a job, the more a worker is compensated. Workers with more
human capital are more productive and command higher wages than workers
with less human capital.