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21-04-2014, 08:00 AM
An honorable member of the Coffee Shop Has Just Posted the Following:
this is what US economic bullshit lecturers teached your PM LHL and his son in the US .... Opportunity cost, a bag of bullshit.
No wonder they get it wrong all the time?
Is this Pinoy independence day an opportunity cost to LHL?
And the next PM of Singapore, the father's army boy, studied economic in US, he is going to screw you more when he come back to rule.
Gen Y Singaporeans it is your call to vote him out in 2020 onwards ...?
Academically respectable, but still relevant? Photo: Tanya Lake
Is it possible the discipline of economics is becoming so mathematical it's in the process of disappearing up its own fundament?
While you're thinking about that, let me take the opportunity to ask you a quiz question (it's a holiday weekend, after all).
You've won a free ticket to see an Eric Clapton concert (which has no resale value). Bob Dylan is performing on the same night and is your next-best alternative activity. Tickets to see Dylan cost $40. On any given day, you'd be willing to pay up to $50 to see Dylan. Assume there are no other costs of seeing either performer.
So what is the ''opportunity cost'' of seeing Clapton? Is it $0, $10, $40 or $50? Take your time (especially if you fancy yourself as an economist).
The opportunity cost of a decision is the value (benefit) of the next-best alternative. So the right answer is $10. When you go to the Clapton concert you forgo the $50 of benefit you would have received from going to the Dylan concert.
But that's the gross benefit. You also forgo the $40 of cost, so the net benefit you forgo is $10.
If you didn't get the right answer, don't feel too bad. When two economists at Georgia State University, Paul Ferraro and Laura Taylor, asked that question of almost 200 economists attending a professional conference, almost 80 per cent got the wrong answer.
The answers they gave were spread across the four possible answers, with more than a quarter saying $50, apparently believing it was only the ''willingness to pay'' of $50 that was relevant.
The next most popular answer was $40, apparently because people thought the cost of a Dylan ticket must also have been the opportunity cost. Those who answered $0 must have concluded there could be no opportunity cost if the Clapton concert was free.
This left fewer than 22 per cent of respondents getting the right answer. And if that (along with your own failure to get it right) doesn't shock you, it should.
Read more: http://www.smh.com.au/business/moder...#ixzz2zNRSii5P (http://www.smh.com.au/business/modern-economists-are-clever-with-numbers-but-way-out-of-tune-20140418-36w84.html#ixzz2zNRSii5P)
Click here to view the whole thread at www.sammyboy.com (http://singsupplies.com/showthread.php?179908-Opportunity-cost-in-Econmice-theory-no-wonder-they-screwed-up-Singapore&goto=newpost).
this is what US economic bullshit lecturers teached your PM LHL and his son in the US .... Opportunity cost, a bag of bullshit.
No wonder they get it wrong all the time?
Is this Pinoy independence day an opportunity cost to LHL?
And the next PM of Singapore, the father's army boy, studied economic in US, he is going to screw you more when he come back to rule.
Gen Y Singaporeans it is your call to vote him out in 2020 onwards ...?
Academically respectable, but still relevant? Photo: Tanya Lake
Is it possible the discipline of economics is becoming so mathematical it's in the process of disappearing up its own fundament?
While you're thinking about that, let me take the opportunity to ask you a quiz question (it's a holiday weekend, after all).
You've won a free ticket to see an Eric Clapton concert (which has no resale value). Bob Dylan is performing on the same night and is your next-best alternative activity. Tickets to see Dylan cost $40. On any given day, you'd be willing to pay up to $50 to see Dylan. Assume there are no other costs of seeing either performer.
So what is the ''opportunity cost'' of seeing Clapton? Is it $0, $10, $40 or $50? Take your time (especially if you fancy yourself as an economist).
The opportunity cost of a decision is the value (benefit) of the next-best alternative. So the right answer is $10. When you go to the Clapton concert you forgo the $50 of benefit you would have received from going to the Dylan concert.
But that's the gross benefit. You also forgo the $40 of cost, so the net benefit you forgo is $10.
If you didn't get the right answer, don't feel too bad. When two economists at Georgia State University, Paul Ferraro and Laura Taylor, asked that question of almost 200 economists attending a professional conference, almost 80 per cent got the wrong answer.
The answers they gave were spread across the four possible answers, with more than a quarter saying $50, apparently believing it was only the ''willingness to pay'' of $50 that was relevant.
The next most popular answer was $40, apparently because people thought the cost of a Dylan ticket must also have been the opportunity cost. Those who answered $0 must have concluded there could be no opportunity cost if the Clapton concert was free.
This left fewer than 22 per cent of respondents getting the right answer. And if that (along with your own failure to get it right) doesn't shock you, it should.
Read more: http://www.smh.com.au/business/moder...#ixzz2zNRSii5P (http://www.smh.com.au/business/modern-economists-are-clever-with-numbers-but-way-out-of-tune-20140418-36w84.html#ixzz2zNRSii5P)
Click here to view the whole thread at www.sammyboy.com (http://singsupplies.com/showthread.php?179908-Opportunity-cost-in-Econmice-theory-no-wonder-they-screwed-up-Singapore&goto=newpost).