Experienced economist and not so experienced economist are walking down the road. They come across a pile of horse manure lying on the asphalt.
Experienced economist: "If you eat it I'll give you $20,000!"
Not so experienced economist runs his optimization problem and figures out he's better off eating it so he does and collects money. Continuing along the same road they come across another pile of horse manure.
Not so experienced economist: "Now, if YOU eat this I�ll give YOU $20,000."
After evaluating the proposal experienced economist eats it and collects the money.
They go on. The not so experienced economist starts thinking:
"Listen, we both have the same amount of money we had before, but we both ate horse manure. I don't see us being better off." The experienced economist replies "Well, that's true, but you overlooked the fact that we've been just involved in $40,000 of trade."
Submitted October 04, 2017 at 07:08AM by ProductivityJourney http://ift.tt/2g9A57Z
