What is human capital? A. Immigrant labor B. Someone who ...

[SGallaher96]

What is human capital?
 
  A. Immigrant labor
  B. Someone who operates heavy equipment
  C. Your professor's knowledge of the economy
  D. A car assembly line robot

Question 2

In an episode of the sitcom Seinfeld, Jerry and his friends Elaine and George are waiting to be seated at a Chinese restaurant. Tired of waiting, Elaine convinces the others that they should bribe the matre d' to get a table.
 
  a. What factors should they consider when they are deciding how high to make their bribe?
  b. Jerry, Elaine, and George had tickets for a movie after dinner. How would this have affected the amount that they were willing to pay as a bribe?
  c. The amount that they finally decide to pay is higher than the value of the meal that they would have had. Does this mean that they are being irrational?

[choc0chan]

Answer to Question 1

C Answer C uses the definition of human capital on page 35.

Answer to Question 2

a. They should consider the opportunity cost of the time that they will have to spend waiting to get a table. This calculation would depend on how much they value the best alternative activity that they could have been doing instead of waiting.
b. The fact that they had to catch a movie would have increased their opportunity cost of waiting.
c. Not necessarily.Given that they had already been waiting for a while and had to catch a movie after dinner, it's possible that they placed a very high value on the time that they spent waiting for the table.
Adapted from http://yadayadayadaecon.com/clip/10/