The level of Gross Domestic Product (GDP)
The level of the Gross Domestic Product of a nation measures the total amount of income earned at a given time in the economy as well as the total expenditure out of the production of services and goods in the economy. Gross Domestic Product is an appropriate gauge of measuring the economic prosperity of a nation while the real Gross Domestic Product is an appropriate measure of the economic progress. Accordingly, I would rather dwell in a country that has a high Gross Domestic Product level despite having a low rate of growth compared to living in a country that has a low Gross Domestic Product level and a high rate of growth since the Gross Domestic Product level is a gauge of prosperity (HUBBARD, 2018).
Opportunity cost associated with investing in human capital
The opportunity cost associated with investing in human capital is actually the consumption loss which results from resource redirecting towards investment. It is possible to overinvest in human capital due to the diminishing marginal returns. For instance, a country may overinvest in human capital if individuals prefer higher consumer spending as opposed to less future growth. Also, the opportunity cost associated with investment in human capital is the consumption loss that is required to avail resources for an investment (HUBBARD, 2018). Similarly, a country can overinvest in human capital if individuals become highly educated and overqualified for job demands. For instance, if a Ph.D. holder in the field of Psychology finds that the only best job he or she can do is managing a hotel. The opportunity cost of attending a college is a loss of resources for investment. Attending college needs one to take his or her entire time for a given period of time and also needs to pay for the tuition. All these resources could have been used to make an investment.
Reference
HUBBARD, R. (2018). MACROECONOMICS. [S.l.]: PEARSON.
