In what way is human capital superior to other sources like physical capital? How a large population
is turned into a productive asset? Explain.
Answers
Answer :
For production, we need four resources :- land, labour, physical capital and human capital. Out of these four, human capital is superior to other resources. We know that human capital consists of intangible things like knowledge and skills. Without knowledge and skills, none of the other uses can be utilised for production. Alone raw materials or money can not produce goods. We need someone who knows how to make products. We need knowledge for production, which is provided by human capital only. Hence, human capital is superior to other resources.
How can a large population be turned into a productive asset?
As we discussed above, knowledge and skills are required for production. This further means that the human should be educated and knowledgeable in order to produce goods. Hence, education is helpful to turn large population into a productive asset. Training should be provided to the population to enhance their skills.
Not only education, but health is also required to make a large population turn into asset. This is quite obvious that an unhealthy population would not be able to utilise his skill as much as he could being healthy. Hence, health is another aspect which can make population into asset.
Answer::
Investments made in the form of reduction of unemployment,medical care, training, education, etc on the population can change a large population into a positive asset.
Human resource is superior than other resources like land and physical resource because human capital is necessary to control other sources. In other words, land and capital can not be useful on it's own as it can not work on it's own
Explanation::
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