The concept of opportunity cost in economics is quite basic and one would assume that professional economists would be able to answer simple questions about it. In a research paper, that is exactly what two economists from Georgia State University set out to test. Link to paper. They asked the following question to approximately 200 PhD economists/graduate students, of whom 120 has taught an introductory class in Economics.
Take a moment to read and answer the question.
This question is actually a simple one, and can be solved very easily if you understand the concept of opportunity cost.
If you answered $10, you'd be correct. The opportunity cost of going for the Eric Clapton concert is the value of the next best alternative: the value of going to Bob Dylan. This is simply the willingness to pay for Bob Dylan ($50) less the price of the ticket ($40).
However, you'd be surprised to know that only 21% of the professional economists surveyed answered "B: $10", and the rest of them answered the question wrongly.
The researchers suggest that in university economics there's too much focus on techniques and problems at the expense of teaching students how to think about economic problems.
As a teacher, opportunity cost, marginal thinking, and efficiency are the three main themes of my classes. A good understanding of these three ideas will help students apply economics in their daily lives. I conduct classes on Friday, Saturday, and Sunday. Click to find out more.