You guys may not realize this, but I have sources. Everywhere. I have one who’s listening to your conversation right now, and reporting back to me that you insist upon using the word “irregardless.” Shame on you.
Several of these operatives are in the great commonwealth of Virginia, and one has unearthed an amusing tale of policy-making gone awry, which I will now highlight to distract you all from the fact that half of the District is without power and the Metro is on fire. Virginia’s standards for the maintenance of infrastructure may be, how should I say, Kristol-esque. In the classroom, however, they expect the best. And by best I mean the absurdly unachievable.
I’m all for exposing kids to economic concepts–it’s a hobby of mine, actually–but Virginia has added a new requirement for the Virginia Standards Of Learning Exam, that third graders–eight year olds, basically–should understand “opportunity cost.”
Opportunity cost is the cost (sacrifice) forgone by choosing one option over an alternative one that may be equally desired. Thus, opportunity cost is the cost of pursuing one choice instead of another. Every action has an opportunity cost. For example, someone who invests $10,000 in a stock denies oneself the interest that one can earn by leaving the $10,000 dollars in a bank account instead. Opportunity cost is not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure or any other benefit that provides utility should also be considered.
Opportunity cost is a key concept in economics because it implies the choice between desirable, yet mutually exclusive results. It has been described as expressing “the basic relationship between scarcity and choice.”
Now, this is all as natural to me as breathing, but that’s because I’ve spent the last ten years thinking about economics all the time, to the great detriment of my mental health and personal relationships. It is fair to say that most of the undergraduates that yawn through intro econ would have a difficult time explaining the idea coherently. Certainly the average legislator does not get it, although there are probably lots of things readily understood by eight year olds that would bounce off the addled minds of Joe or Jane Q. Representative. I would not, were I a member of the McCain campaign, allow my candidate within fourteen miles of a question about opportunity cost, even if he could easily inform himself on the subject by using a simple Google.
So while I applaud Virginia for having its heart in the right place, I would encourage them to give the tykes a break. They’ll have plenty of chances to learn about opportunity costs as adults sitting on the state’s crumbling highways (but enjoying the low gas tax!).