Sunday, May 18, 2008

Opportunity cost, again

An example of how someone misunderstood the concept of opportunity cost (and proud of it). The article was inspired by an older article by a famous Indonesian economist/politician/former minister. Arya Gaduh has pointed out where the logic went wrong. Teguh Dartanto provided some useful data and calculations.

I feel it's still relevant to raise the issue once again and to remind people about the difference between accounting and opportunity costs.

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