Question

When interest rates rise, how does this affect the present value of human capital investment?

	A.	It has no effect on present value and human capital investment.
	B.	It raises the present value.
	C.	It makes human capital investment more worthwhile.
	D.	It makes human capital investment less worthwhile.

When choosing to pursue college full-time, the costs that must be taken into account in a benefit-cost analysis include:

	A.	tuition and local transportation costs.
	B.	tuition and room and board.
	C.	tuition and forgone earnings during the time in college.
	D.	room and board and the forgone earnings during the time in college

As one progresses through his or her working life, the average income tends to _____, holding the level of education constant.

	A.	fall then rise
	B.	constantly fall
	C.	constantly rise
	D.	rise then fall

Which of these is an example of human capital investment?

	A.	traveling to Beijing to study Chinese in hopes of pursuing a job at a consulate
	B.	taking a break from school to pursue a new hobby
	C.	purchasing a corporate bond in a technology company
	D.	participating in an employer's retirement savings plan that matches contributions

People who believe that success in one's career depends largely on one's innate intellect and work ethic would argue that a college education:

	A.	is the most important tool for earning higher income.
	B.	is useful to the extent that it allows people to signal their natural talents.
	C.	gives people the tools to pursue a specific career path.
	D.	has absolutely no value or usefulness at all.

Answer 1

1. Ans -D) It makes human capital investment less worthwhile.

2. Ans - C) tuition and forgone earnings during the time in college.

3. Ans - D) rise then fall

4. Ans - A) traveling to Beijing to study Chinese in hopes of pursuing a job at a consulate

5. Ans - B) is useful to the extent that it allows people to signal their natural talents