Wednesday, September 07, 2005

And You Think the Concept of Opportunity Cost is Easy

In any introductory economics textbook, the concept of opportunity cost is usually defined and explained in the first few chapters. So anyone who has taken an introductory economic class can legitimately claim he or she understands the concept.

Is the concept really that simple? It turns out that such a seemingly "easy" concept is not well grasped by even professional economists!! You hear it right, PROFESSOINAL ECONOMISTS who do economics for a living!

Read this and this as well. And my former professor at George Mason University Tyler Cowen has this to say, and I totally agree with his conclusion about the concept of opportunity cost being a gross but not a net concept.

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