Trade, the Internet, and product innovation have greatly enlarged the number of goods (<italic>N</italic>) in the consumer's choice set. The welfare effect of the growth in <italic>N</italic> has been extensively discussed in the specialized literature, but very little has filtered down to our textbook models of a competitive...

Human capital models have mainly focused on the rate of return to investment in a homogeneous stock of capital. Yet, individuals have different initial attributes that determine comparative advantage in producing different types of human capital. The authors find that mathematical ability is an...