Gingrich says he's considering presidential run

[ShaneWalter]

......uhh, I am still making that argument. I am not wrong.

Taxes are a direct cost, as well as an opportunity cost. When I buy a box of brownies instead of a box of donuts, the opportunity cost is the donuts and the cost is the amount I spent on the brownies.

Guys, do you realize this is what kid is arguing right now? Kid is right. That's not an opportunity cost, unless the box of donuts would have been free.

[Hauldren Collider]

Idiot.

I am sacrificing my ABILITY to buy donuts when I buy brownies. THAT HAS A COST.

The opportunity cost of taxes is that the government is directing spending rather than the private sector, and it is significant.

[ShaneWalter]

Idiot.

I am sacrificing my ABILITY to buy donuts when I buy brownies. THAT HAS A COST.

The opportunity cost of taxes is that the government is directing spending rather than the private sector, and it is significant.

No. That is not an opportunity cost.

I'm not even disagreeing with your overall point, but the example you used shows you don't quite understand what opportunity cost is.

If you could have gotten the donut for free (but only if you didn't buy a brownie) but instead choose to buy the brownie, then you could say the opportunity cost of the brownie was $1.

Thus, if attending college has a direct cost of $20,000 dollars a year for four years, and the lost wages from not working during that period equals $25,000 dollars a year, then the total economic cost of going to college would be $180,000 dollars ($20,000 x 4 years + $25,000 x 4 years).

Albert posted that as an example of opportunity cost. Notice how "opportunity cost of a $20,000 car that you could've had but now can't because you chose to spend $20,000 at university instead" isn't included? Because that's not an opportunity cost, it is ALREADY PART OF THE ACCOUNTING COST.

[DaShi]

Children. Actually, I think I just had this same conversation three weeks ago. Weird.

[ShaneWalter]

Hmmm... it seems I'm wrong about opportunity cost. When we discussed opportunity cost in my managerial accounting class, it was how I described it but that's probably because we only looked at opportunity cost as it related to decision analysis, and decision analysis only cares about relevent costs (those costs that actually change between two scenarios). If your choice is between buying a donut or buying a bagel, the opportunity cost wouldn't be relevent I guess, because it'd be the same between the two alternatives.

Still it seems a pretty silly to consider opportunity cost that way. What benefit to your analysis does it do to consider the opportunity cost when you've already considered it as part of your accounting cost?

[Al B. Sure!]

Shanewalter:



you post all that nonsense and even quote me but I doubt you really read or digested anything that I said.

[DaShi]

Accountants and economists often have different views of opportunity costs. This is why there are wars.

[ShaneWalter]

Shanewalter:



you post all that nonsense and even quote me but I doubt you really read or digested anything that I said.

Okay, so we're saying the opportunity cost of buying a brownie is that you didn't get to buy a donut?

So why am I wrong when I say that by the same logic, the opportunity cost of going to university for 4 years is that you didn't get to buy a sports car?

[Al B. Sure!]

Albert posted that as an example of opportunity cost. Notice how "opportunity cost of a $20,000 car that you could've had but now can't because you chose to spend $20,000 at university instead" isn't included? Because that's not an opportunity cost, it is ALREADY PART OF THE ACCOUNTING COST.

I think you might have realized your mistakes but let me re-iterate something...

If you spend a dollar for a donut when you could have had a brownie, the opportunity cost of the donut is the best alternative (this is important. It's not all alternatives or any alternatives, but the best), in this simple case, a brownie. Assuming you value donuts and brownies the same and they are priced the same, then the value of the brownie is $1.

Like I said before:

There is no difference between the value/utility I receive from the donuts worth $1 dollar and the value/utility I receive from working for a few minutes and earning $1. The fact that the latter is cash isn't important.

$1 in cash or $1 in brownie is in this case the same thing. Why? Because the $1 has no intrinsic value; it's just a store of value for what I can exchange for the dollar (in this simple case, a brownie).

[Al B. Sure!]

Okay, so we're saying the opportunity cost of buying a brownie is that you didn't get to buy a donut?

So why am I wrong when I say that by the same logic, the opportunity cost of going to university for 4 years is that you didn't get to buy a sports car?

From wiki:

Opportunity cost is the cost related to the next-best choice available to someone who has picked between several mutually exclusive choices.

It could be, if it were the next-best choice as valued by you.

Also, for your other post, let's make this clear (like the fifth time I've posted it):

economic cost = accounting cost + opportunity cost

[ShaneWalter]

I think you might have realized your mistakes but let me re-iterate something...

If you spend a dollar for a donut when you could have had a brownie, the opportunity cost of the donut is the best alternative (this is important. It's not all alternatives or any alternatives, but the best), in this simple case, a brownie. Assuming you value donuts and brownies the same and they are priced the same, then the value of the brownie is $1.

Like I said before:


$1 in cash or $1 in brownie is in this case the same thing. Why? Because the $1 has no intrinsic value; it's just a store of value for what I can exchange for the dollar (in this simple case, a brownie).

Okay, thanks. I understand now. Sorry about pulling the thread off on a tangent.

[Al B. Sure!]

Okay, thanks. I understand now. Sorry about pulling the thread off on a tangent.

You didn't pull it off at all. If anything, you were still talking about the same thing that Kidicious did when HE pulled it off on a tangent.

oh and managerial accounting That was a useless class. I actually bought two textbooks for my managerial accounting class because the professor changed the edition (NEVER buy the book before you get the syllabus thinking it's better to get it before the rush; I repeated the same mistake a year later with one of my finance classes). Overall, the class was a joke though. Actually easy for accounting without as many retarded FASB and GAAP rules and minutiae

[Kidlicious]

The donuts don't cost anything, because you didn't buy them or forgo earnings to buy them you fools.

Let me try again.

Go back to the example of the factory where a mix of product x and product y are made. The company that owns the factory has to choose between making either x or y, but there is another choice they have to make. They have to choose whether or not to use the factory of rent it out. When they make the choice to use it they have to factor in the opportunity cost of using it, which is the rent they could have collected. THAT'S BECAUSE THEY ARE FOROING EARNINGS! That's why you figure out the economic cost which is greater then the accounting cost.

When an individual has to decided how much something costs to them they don't figure that they will have to pay for it with money and another product that they want. BECAUSE THEY DON'T OWN THE OTHER PRODUCT. THEREFORE IT DOESN'T COST THEM ANYTHING WHEN THEY DON'T GET IT!

Look at it another way. If someone steals a dollar from you did they steal a dollar and the thing you were going to buy with it? NO! They only stole a dollar, and if you take them to court the judge will not listen to your nonsense if you tell him that you were going to buy a donut with that dollar so really the thief stole a dollar and a donut from you.

If however, you own a truck that you use in your business to earn money and someone steals that truck you will have to rent a truck to do your busness. If you take the thief to court it is reasonable to ask the judge to make the thief pay for the cost of renting the truck.

No if you still do not understand there is no hope for you. You should never take any business ventures or ever talk about costs in anyway, because you are completely incapable of understanding such things. That is all.

[Al B. Sure!]

A person who has $15 can either buy a CD or a shirt. If he buys the shirt the opportunity cost is the CD and if he buys the CD the opportunity cost is the shirt. If there are more choices than two, the opportunity cost is still only one item, never all of them.

Or if you don't trust wikipedia, how about a Stanford economics professor?

When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you cannot spend the money on something else. If your next-best alternative to seeing the movie is reading the book, then the opportunity cost of seeing the movie is the money spent plus the pleasure you forgo by not reading the book.

What you're not understanding is that the donut has a value of $1. If you go the school and count the unearned income from the alternative to work (that is an opportunity cost), it is the same thing as counting the donut as $1 because the money is only a store of value that is used to purchase something. The cash not earned is only valuable in that it is used to purchase things giving you utility equivalent to the dollar value of the earnings (ie- a donut for every $1). There is no difference between a dollar and a donut worth a dollar if the highest valued preferred use of the dollar (the best alternative) is to buy a donut.

You are so wrong, Kidicious. Really, trust me. I don't know how to make it any clearer.

As for your whole judge thing, whatever. Of course you wouldn't do that. But that doesn't change the definitions of what opportunity cost or what economic cost are.

Again, Economic cost = accounting cost + opportunity cost

[Kidlicious]

You idiot. Are you actually some kind of business student? Only bad things can come from that. Your professors should fail you as soon as they discover your limitations without even the smallest feeling of guilt.