The table shows the distribution of human and non-human capital for two people, Sam and Janet
a) Looking just at tangible assets (non-human capital), by how many times does Janet's wealth exceed Sam's?
b) Assume that both human and non-human capital earn a 10 percent annual interest rate. Calculate Sam's and Janet's total income.
c) By how many times does Janet's total income exceed Sam's?
d) Which comparison results in a more equal distribution?
e) Which comparison gives a better indication of each person's economic condition?
a) Janet has 20 times as much wealth as Sam.
b) Sam's income is $30,000 and Janet's is $41,000.
c) Janet's income is 1.37 times Sam's.
d) The comparison of income results in a more equal distribution.
e) The comparison of income gives a better indication of each person's economic condition because it includes both human and non-human capital, while the comparison of wealth only includes non-human capital.
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