An example of human capital is the purchase of a computer to help accountants Tr

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An example of human capital is the purchase of a computer to help accountants True False Question 2 4 pts Which of the following is a reason that some economists do not agree with the concept of a labor-leisure tradeoff? OWages are paid in dollars and leisure is measured in time, hence there is no way to compare the two Some people do not work at all, so there is no labor-leisure tradeoff for those individuals. In the long-run, the supply of labor hours is perfectly inelastic. On a day-to-day basis, most jobs do not have the flexibility to allow people to weigh the benefits and costs to determine how much they should work that day. An increase in the wage rate always leads to an increase in the supply of labor hours, therefore the workers do not think of choosing leisure over labor.

Explanation / Answer

Answers:

1)False.

The term human capital was invented by Theodore Schultz. The theory explains that human capital is the same as any other type of capital investment which can be invested in terms of training and education which in turn enhances the efficiency of the labour force which will help in increasing productivity.

2) The domestic firms would have to pay higher wages and make less profit.

3) Wages are paid in dollars and leisure is measured in time, hence there is no way to compare the two.

4) False.

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