4. Problems and Applications Q4 What is the opportunity cost of investing in capital? Improved technology that leads to faster growth Higher taxes The loss of consumption that results from redirecting resources toward investment True or False: If the extra output produced from an additional unit of capital falls as the stock of capital rises, the country may be overinvesting in capital. True False What is the opportunity cost of investing in human capital? Lower taxes The goods or resources that could be produced if the resources to produce them were not invested in human capital Improved technology that leads to faster growth True or False: A country may be overinvesting in human capital if each person's education level matches his or her profession. True False