Don Lloyd at Catallarchy posts what he calls an “Opportunity Cost Puzzle.” What I find puzzling is that so many of the other commenters find it puzzling. I always thought that the opportunity cost of an action is the utility you would have gained from choosing the alternative ranked #2 in your preference ordering. It’s what you would have gotten if you would have done the next most preferred thing. If that’s right, then the answer to Don’s puzzle is easy. My answer is in the Catallarchy comments. (Scroll way down.) Am I right? Is most everybody else confused? Or am I just being philosophically willful in refusing to think of the problem in money terms?
Opportunity Costs
Will Wilkinson 