Thursday, June 14

One weird thing I saw about an ad from an Econs tutor:


Cartoon mum : Hey, son. It costs $20 for a bowl of 6 beef balls or fishballs, but a bowl of mixed balls - 3 beef and 3 fish - cost $22. Why is that ?

Cartoon boy : Umm ... I know ! That's because the hawker has to scoop twice to make a bowl of mixed balls ! So it costs more !

Mum : What ?!? You've studied Econs for so long, that's the kind of answer that you're giving me ?

Boy : Help, Ko Sir ! How can I explain this problem ?

KevinKo : Actually, the answer is very simple ! Do you remember the concept of the Demand Curve ? As you consume a good, every additional unit of good brings you fewer units of utility (satisfaction) than the last.

(something something) So if you have a bowl of 6 beef or fish balls, the first 3 balls will give you more satisfaction than the last 3. (something something) But if you have a bowl of 3 beef and 3 fish balls, the last 3 will give you just as much, if not more, satisfaction than the first 3. So people would be willing to pay more for that, even if the number of balls is the same ! (something something)

And to explain the concept of opportunity cost, Ko used the "giving up the forest for a single tree/giving up dating and settling down with one girl" analogy.

Amazing.

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