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RESPONSESTOTHEDISCUSSIONQUESTIONSOFCHAPTER4:Nobody–certainlynoeconomist–cansaywhatthetrueorobjectivecostisforanyoftheseitems.Thingsdon’thavecosts,onlyactionsordecisionsdo.TaketheCreedconcertticket,forexample.Arewetalkingaboutthecostofpurchasingtheticket?Thecostofprintingtheticket?Thecostofgivingthetickettoafriendbecauseyouaretooilltoattendtheconcert?Thecostoflosingtheticket,orrollingitupandsmokingit?Don’tforgettoaskyourself,“costtowhom?,”“costofdoingwhat?”Wecanonlyguessatthepricethatyouwouldinitiallyaskforit,butwebelieve,giventhatgoldsellsforabout$300perounce,itwouldbecostlyforyoutosellitatasubstantiallylowerprice(andextremelydifficultforyoutosellitatapriceabove$300perounce).Ifyousimplystumbledupontheeight-ouncenugget,thecostofyourdiscoveringitmightindeedbezero–aresultofpureluck.But,onceyouownthenugget,withamarketvalueofabout$2400,thereisacostofcontinuingtoownit.Youcouldsellitfor$2400–yournextbestopportunityasopposedtoowningthenugget.It'spresumablythelowest-costwayavailable.Thesewomendonothavevaluablealternativeopportunities.IntheU.S.,thatwouldbeaprohibitivelycostlywaytokeepalawnmowed.What'sitworthtoatravelertosave4hours?Ofcourse,ifsomeoneenjoystraveling,orcangetalotofworkdoneduringthebustrip,orfearsairplanes,thecalculationsbecomemuchmorecomplicated.(a)2.5centsperpage.(b)Ifthelibraryexpectstoexceedits20,000copiesthismonth,itwillcostthelibrary1.5centsperpagetoprovideHarrietwithacopy.Otherwisethecosttothelibrarywillbeonly0.5centsperpage.(c)Whatevershehastopaywilldependonwhatothercopyingservicesarecharging.Shewon'tpaythelibrarymorethanthefeechargedelsewhereplusthecosttoherofwalkingtothecompetitor'sshop.(d)Ithasnoeffect.Thegasolineconsumedisclearlyamarginalcostofdriving.Soisanydepreciationthatwillresultfromyouruseofthecaroncompanybusiness.Buttherestofthedepreciationandalltheotherscostsmentionedarecostsofowningacar,notcostsofdrivingit.Sinceyouhavealreadychosentoownacar,theonlycostsyoushouldcomparewith20¢permilearegasolinepluswearandtearcausedbycompanybusiness.Itwillprobablypayyoutodriveyourowncar.Ifpeopleareunwillingtoaccepttheideathatonlyfuturecasualtiesshouldbeconsideredinpolicymaking,thenagovernmentdependentuponpopularsupportmayhavetoaccommodatetheconvictionthatpastlossesruleoutparticularcoursesofaction.Butgovernmentofficialswillmakethisaccommodationinanticipationoffuturepoliticalconsequences.Isthegovernmenttherebyyieldingtoirrationality?Notnecessarily.Thefamilyofsomeonewhohasdiedinawarwill(inthefuture!)oftenbearagreaterburdenofgriefiftheyarecompelledtorecognizethathisdeathaccomplishednothing.Whatarethecostsyoucouldavoidbylettingtheapartmentgo?Therentisone.Whatarethecoststhatyouavoidbyretainingtheapartment?Searchingnextfallandmovingallyourstufftwotimesaremajorcostsavoidedorbenefitsobtained.Noticethatyouarenotsublettingbelowcostifyoudecidetoretainoccupancyandlateracceptanopportunitytosubletforlessthanyourownmonthlyrent.(a)Itwastheincomehecouldobtainbyrentingthesitetosomeoneelse.(b)Itwastherenthehadtopay.(c)Onlyifwaterfallswerenotscarceresources.Ifthereweresomanywaterfallsthateveryonewhohadanyuseforawaterfallcouldfindoneavailable,sothatusingitforaparticularpurposedidnotdenyanyoneavaluableopportunitytouseitforadifferentpurpose,thenandonlythenwouldtherewouldbenocostassociatedwithusingthewaterfall.Awaterfallusedtopowerashoefactorycannotbeusedtopoweragrainmill,andawaterfallusedforindustrialpurposesmaytherebybecomeunavailableasasourceofaestheticpleasure.(d)ThefactthatthewaterfallisGod'sgiftisirrelevant.EvenpeoplewhowereonlyfaintlyreligioushavelongspokenofagriculturalproduceasagiftofGod;buttheyhavenotforthatreasonconcludedthatnorentwouldbechargedfortheuseofagriculturalland.Thereisacosttousinganaturalagentaswellasanagentproducedbyhumaneffortifusingtheagentinonewaydeprivesanyoneofavaluedopportunitytouseitinsomeotherway.Itisthedemandersofwaterfallswhodeterminetheopportunitycostofusingthem.Inarecession,thevalueofalternativejobopportunitiesdeclinesformanypeoplewhowereconsideringenlistment.Somilitaryservicelooksmoreattractive.(a)Toofferpeoplewithpooropportunitiesabetteropportunitythananytheynowhaveisnotdiscriminatingagainstthem.Thefactthattheyhavepooropportunitiesmayitselfbearesultofdiscrimination.Butthemilitaryispartiallycompensatingforthisdiscrimination,notreinforcingit.(b)Thearmedforcescanobtainvolunteersofhighintelligenceandskillinthesamewaythatprivateemployersdoit:byestablishinghighstandardsforjobholders.Ofcourse,awagemustthenbeofferedsufficienttoattractpeoplewhosatisfythesestandards.(c)Whyisn'tthederisivetermmercenaryappliedtoofficers?Therearesomethingsthatmanyofusdon'twantdoneformoney.Butwhoeverdoesanythingentirelyformoney?(a)Thecostofservingonajuryisthevalueoftheopportunitiestherebyforgone.(b)Peoplewhodisliketheirworkandwhoseemployerspaythemfullwagesduringjurydutywillfindthenetcostofjuryservicenegative.Thecosttoretiredpeoplemightalsobeverylow.Butself-employedpeoplewhoseincomestopsentirelywhentheyarenotworkingcouldfindthecostdisastrouslyhigh.(c)Ifweallowedpeopletovolunteerforjuryduty,thosewhovolunteeredwouldallbedem