Phil gets the house to himself for a few days and he’s opted to upgrade the technology in the home. He programs everything in the house to be controlled by his iPad, essentially freeing himself to do other tasks that require his attention. He can now turn on lights, the TV, and the fireplace from his device. Long term growth in economies is often fueled by capital investments, which allows populations to be more productive. The same is true at the household level, such that investments in capital improve the productivity of inhabitants.
See more: economic growth, marginal product of labor, productivity, standard of living, technological change, technology
Jay takes Joe out to the driving range and discovers that Joe is a natural. Joe’s natural skill is a form of human capital that gives him the potential to earn a large salary in the future. Human capital is often acquired through years of training, education and hard work. But sometimes, luck gives some people an edge over others. If Joe works hard and practices, he could follow the path of other young golfers with natural talent like Tiger Woods and Lexi Thompson. Jay wants to do all he can to make that happen.
See more: human capital, incentives, income inequality, labor, productivity, tournaments, wages, winner take all