Common Sense Economics: What Everyone Needs to Know about Wealth and Prosperity
Politicians, government officials, and lobbyists often speak of “free education,” “free medical care,” or “free housing.” This terminology is deceptive. These things are not free. Scarce resources are required to produce each of them and alternative uses exists. For example, the buildings, labor, and other resources used to produce schooling could instead produce more food, recreation, environmental protection, or medical care. The cost of the schooling is the value of those goods that must be sacrificed. Governments may be able to shift costs, but they cannot eliminate them.
- While watching this video, think about things you might do this weekend, and what they cost – not in terms of money, but in terms of lost opportunities: For instance, if I have a choice between going to a birthday party or a concert, then the cost of the concert, is one birthday party. But then think further: it might be more than that. Not choosing the birthday party might also cost me a friendship. So the concert would cost one party and one friendship.
- TINSTAAFL: Think about things that are presented to you as “free” – including even a “free” school lunch. Now think about what the opportunity costs of those free items might be. For instance, would your school be better off if they could use “free” lunches to pay for books? For computer equipment? For new lights, paint, or a bigger parking garage for seniors. What other things are offered for “free” that actually have other costs.
This reading is an excerpt from Certell’s Common Sense Economics eBook. Certell offers curriculum materials and eBooks free of charge for students and teachers. Click here to download the Common Sense Economics materials.
28, Aug. 2018, Dinner plate and setting encircled and crossed out as not Free [Digital image]. Retrieved from <google.com>.