Question

Distinguish between physical capital and human capital.

Answer 1

Differences between physical capital and human capital.

Physical Capital	Human capital
1. Any non-human asset made by humans and then used in production it is known as physical capital.	1. When the existing 'human resource' is further developed by becoming more educated and healthy we call it human capital formation that adds to the productive power of the country.
2. It is tangible and can be sold in the market, e.g., goods like a bus or a machine.	2. It is not tangible and cannot be sold in the market because it is naturally built in the mind and body of its owner, only the services of human capital can be sold.
3. Physical capital is separable from its owner.	3. Human capital is inseparable from its owner.
4. Physical capital benefits only the owner.	4. Human capital benefits not only the owner but the society in general.
5. Physical capital is inferior to human capital.	5. Human capital is superior to other resources like land and physical capital.
6. Physical capital cannot become useful on its own.	6. Human capital can make use of physical capital.