Do students recognize an opportunity cost when they see one? Evidence from introductory economics

William Polley

Economics Bulletin, 2014, vol. 34, issue 3, 1550-1556

Abstract: The well-known study by Ferraro and Taylor (2005) on the understanding of opportunity cost has sparked considerable debate. This paper addresses one specific aspect of the question, namely the issue of units of measurement when converting goods to dollars for comparison purposes. Results strongly suggest that the source of difficulty with the original question stems from the confusion over units of measurement rather than with the concept of opportunity cost itself.

Keywords: opportunity cost; willingness to pay; consumer surplus (search for similar items in EconPapers)
JEL-codes: A2 D1 (search for similar items in EconPapers)
Date: 2014-07-17
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Citations: View citations in EconPapers (2)

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