In 2-3 sentences, explain the difference between physical capital and human capital. Give 1 example of each.

Answer 1

Physical capital refers to tangible assets such as buildings, machinery, and tools that are used in the production of goods and services. On the other hand, human capital refers to the knowledge, skills, and abilities of an individual that are used to create value. An example of physical capital is a factory, while an example of human capital is an employee's specialized skill set.