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Do students recognize an opportunity cost when they see one? Evidence from introductory economics

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Listed:
  • William Polley

    (Western Illinois University)

Abstract

The well-known study by Ferraro and Taylor (2005) on the understanding of opportunity cost has sparked considerable debate. This paper addresses one specific aspect of the question, namely the issue of units of measurement when converting goods to dollars for comparison purposes. Results strongly suggest that the source of difficulty with the original question stems from the confusion over units of measurement rather than with the concept of opportunity cost itself.

Suggested Citation

  • William Polley, 2014. "Do students recognize an opportunity cost when they see one? Evidence from introductory economics," Economics Bulletin, AccessEcon, vol. 34(3), pages 1550-1556.
    • Handle: RePEc:ebl:ecbull:eb-13-00210
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I3-P141.pdf
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    References listed on IDEAS

    as
    1. Ferraro Paul J & Taylor Laura O, 2005. "Do Economists Recognize an Opportunity Cost When They See One? A Dismal Performance from the Dismal Science," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-12, September.
    2. William E. Becker, 2007. "Quit Lying and Address the Controversies: There are No Dogmata, Laws, Rules or Standards in the Science of Economics," The American Economist, Sage Publications, vol. 51(1), pages 3-14, March.
    3. Joel Potter & Shane Sanders, 2012. "Do Economists Recognize an Opportunity Cost When They See One? A Dismal Performance or an Arbitrary Concept?," Southern Economic Journal, John Wiley & Sons, vol. 79(2), pages 248-256, October.
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    Cited by:

    1. William J. Polley, 2015. "The Rhetoric of Opportunity Cost," The American Economist, Sage Publications, vol. 60(1), pages 9-19, May.
    2. Frank G. Sandmann & Julie V. Robotham & Sarah R. Deeny & W. John Edmunds & Mark Jit, 2018. "Estimating the opportunity costs of bed‐days," Health Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 592-605, March.

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    More about this item

    Keywords

    opportunity cost; willingness to pay; consumer surplus;
    All these keywords.

    JEL classification:

    • A2 - General Economics and Teaching - - Economic Education and Teaching of Economics
    • D1 - Microeconomics - - Household Behavior

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