A healthy person, by maintaining personal hygiene and sanitation, stops the spread of contagious diseases and epidemics. This points to which difference between human and physical capital?
Answer & explanation
Correct answer: option 1
A healthy person, by maintaining personal hygiene and sanitation, stops the spread of contagious diseases and epidemics. Human capital creates both private and social benefits, whereas physical capital creates only private benefit. That is, benefits from a capital good flow to those who pay the price for the product and services produced by it.