Human Capital and Productivity

Steps:

• Identify the core concept: The question seeks a term linking personal qualities, knowledge, and skills to increased productivity.
• Recall economic definitions: Human capital treats education and training as investments that enhance worker output.
• Match to options: Only human capital directly refers to inherent individual attributes boosting efficiency.
• Eliminate mismatches: Other terms focus on external factors like tools or division of labor, not personal qualities.

Why B is correct:

• Human capital is defined as the stock of knowledge, habits, social and personality attributes, including skills, that enable greater productivity, per economists like Gary Becker.

Why the others are wrong:

• A: Enterprise investment involves funding businesses or projects, not individual skills.
• C: Mechanisation replaces human labor with machines, ignoring personal qualities.
• D: Specialisation divides tasks for efficiency, but doesn't assume inherent individual knowledge or skills.

Final answer: B