Question

Distinguish between Physical Capital and Human Capital.

Hint:

Physical Capital includes tools and machines, while Human Capital includes skills and knowledge. One is tangible, the other is embodied in people.

Answer 1

The distinction between Physical Capital and Human Capital is outlined below: \begin{tabular}{|p{6.5cm}|p{6.5cm}|} \hline Physical Capital & Human Capital
\hline Refers to the stock of produced means of production such as machines, tools, buildings, etc. & Refers to the stock of skills, knowledge, and experience possessed by an individual or population.
\hline It is tangible and can be physically touched and seen. & It is intangible and embodied in human beings.
\hline Physical capital is separable from its owner. & Human capital is inseparable from the individual who possesses it.
\hline It depreciates over time due to wear and tear. & It may appreciate over time with experience and education.
\hline Created by investing in physical assets. & Created through investment in education, training, and healthcare.
\hline \end{tabular}