You Can’t Be in Two Places at the Same Time? (opportunity cost)
Once upon a time, there lived a boy named Adam, who dreamed of being in the living room and in the kitchen at the same time. Adam thought that, if he ran fast enough, he could make his dream come true.
So, he gave it a try. He put on his fastest running shoes while he was sitting on the couch in the living room, and then he ran very quickly to the kitchen.
“Well”, said Adam, “I am now in the kitchen, but I am not in the living room anymore. Maybe if I run a little faster it will work.”
So he took a deep breath and ran as fast as he could from the kitchen to the living room. But now that he was in the living room, he realized that he was no longer in the kitchen.
Adam ran back and forth as fast as he could go, but every time he got to the kitchen he was no longer in the living room, and every time he got to the living room, he was no longer in the kitchen.
He finally gave up in frustration. “I guess it just cannot be done”, he said. “I cannot be in the living room and in the kitchen all at the same time.”
What have we learned from Adam? We have learned the concept that economists call “opportunity cost”. Any time Adam spent in the living room was time he could not spend in the kitchen, so the opportunity cost for the time he spent in the living room was the loss of being able to spend that time in the kitchen.
The same situation occurs when spending money. If we spend a dollar on candy, we cannot spend that same dollar on new clothes. We have to make choices, and every choice we make involves giving up another option. Giving up that other option is the opportunity cost.
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