Sue has human capital worth $500,000 and nonhuman capital of $100,000. Todd has human capital worth $10,000 and nonhuman capital of $50,000. The return on each type of capital is 10 percent a year. Sue's income is ________ and Todd's income is ________.

Question

Quizplus · Accepted Answer

Sue's income is 10% of her total capital ($500,000 + $100,000 = $600,000), which is $60,000. Todd's income is 10% of his total capital ($10,000 + $50,000 = $60,000), which is $6,000.

Sue Has Human Capital Worth $500,000 and Nonhuman Capital of $100,000