Final answer:
According to the human capital theory, investments in education should be made if the present value of future earnings exceeds the present value of the costs of completing the education.
Step-by-step explanation:
According to the human capital theory, investments in education should be made if the present value of future earnings exceeds the present value of the costs of completing the education.
This statement is true. The human capital theory suggests that investing in education can lead to higher future earnings. When individuals invest in their education, they acquire knowledge, skills, and qualifications that make them more productive in the workforce. This increased productivity can result in higher wages and better job opportunities.
For example, a high school graduate may choose to attend college, even though it comes with hefty tuition fees and the opportunity cost of not working full-time. However, if the potential future earnings with a college degree are significantly higher than the costs of obtaining that degree, it would be a wise investment.