The Field of Economics

Read this section, and take a moment to read through the stated learning outcomes for this chapter, which you can find at the beginning of the section. These outcomes should be your goals as you read through the chapter. Attempt the "Try It" problems at the end of the section before checking the answers.

Case in Point: Opportunity Cost with The Simpsons

In the animated television comedy The Simpsons, Homer's father, Grampa Simpson, faced a classic problem in the allocation of a scarce resource – his time. He wanted to spend the day with his girlfriend, Bea – it was, after all, her birthday. His alternative was to spend the day with Homer and the family, which he did not really want to do, partly because they never visited him anyway.

Homer and his family prevailed, however, and insisted on taking Grampa to "Discount Lion Safari," a local amusement park. The cost of Grampa's day with his family is the enjoyment he anticipated from spending time with Bea. It all ends up badly for Grampa anyway – Homer's car breaks down on the way to the park. As for the forgone alternative, Bea dies that day, possibly because of a broken heart from not being able to spend the day with Grampa.