Question

Which statement about tradability is correct?

Options

• Neither physical capital nor human capital can be traded

• Physical capital can be traded, while human capital cannot be traded

• Human capital can be traded, while physical capital cannot be traded

• Both physical capital and human capital can be traded freely

Answer 1

Physical capital, being tangible and separable from its owner, can be bought and sold in markets. Human capital cannot be traded because it is intangible and inseparable from the person in whom it is embodied.