Virginia, amusingly, has decided to call its state public school tests the Standards Of Learning Exam. Even more hilariously, Ryan Avent reports that the SOL Exam is now going to ask third graders to understand opportunity costs, a concept that all-too-many adults seem to have a shaky grasp of.
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Truly SOL
13 Jun 2008 05:22 pm
Comments (26)
opportunity cost is a surprising topic for third graders, but is conceptually extremely easy to understand.
See, here is the problem with tests for educational standards: the tests set a de-facto curriculum. Teachers must "teach for the tests" and design their lesson plans around the tests (much like a curriculum). However, the tests aren't very good as curriculum. Instead of the state saying that children should learn certain math, science, and English skills and should be taught in a certain manner, teachers have this rather backwards task instead.
It means when you use time or money for something, you can't use it for something else.
Matt's post reminds me of the time when NPR ran a four part series on homework...
So if I have a machine that can make either Product 1 or Product 2 with $5 of input, and both products sell for $10 apiece, my profit from making and selling either product is 0, because of the opportunity cost?
If you invest $5 to make a product that sells for $10 rather than one that sells for $12, then you opportunity cost for making the $10 product is $2.
On the other hand, you also could have used that $5 to buy a gallon of gas in order to drive to the unemployment office to pick up your check. So that's an opportunity cost too.
Finally, you might have bought a cup of coffee with that $5. The pleasure of consuming that coffee as you sit--jobless and broke in the local Starbucks--is yet another opportunity cost.
Virginia's called their standardized tests the SOLs since I was taking them back in high school in '99 or so. So, y'know, nice try with the snark and all, but you're almost ten years behind the high school sophomores, juniors, and seniors who all gave it their best Beavis and Butthead chuckle way back when. Just sayin'.
That's nothing new, or if it is, it's a return to the past. It was the SOL test when I was in elementary school in Fairfax County in the late '80s. I remember a student actually called in the Shit Outta Luck test in front of the teacher, who was, of course, not as amused as we were.
If you invest $5 to make a product that sells for $10 rather than one that sells for $12, then you opportunity cost for making the $10 product is $2.
So if I make the $10 product, my profit is $10 (revenue) - $5 (production cost) - $2 (opportunity cost) = $3
But if I make the $12 product, my profit is $12 (revenue) - $5 (production cost) = $7
???
So making the $12 product gets me $4 more profit than making the $10 product? That doesn't make sense.
That's nothing new, or if it is, it's a return to the past. It was the SOL test when I was in elementary school in Fairfax County in the late '80s. I remember a student actually called in the S--- Outta Luck test in front of the teacher, who was, of course, not as amused as we were.
So if I have a machine that can make either Product 1 or Product 2 with $5 of input, and both products sell for $10 apiece, my profit from making and selling either product is 0, because of the opportunity cost?
No, your profit is $5 in either case. Your opportunity cost is 0. You have no comparative advantage in choosing between producing either good, with all other factors being equal.
That's nothing new, or if it is, it's a return to the past. It was the SOL test when I was in elementary school in Fairfax County in the late '80s. I remember a student actually called in the S--- Outta Luck test in front of the teacher, who was, of course, not as amused as we were.
Apparently, either Tom Ames or DDP is also among the adults who doesn't understand opportunity cost. ;-)
Mr Noah,
It depends whether you are referring to accounting profits or economic profits. The first should make sense to you, the latter should not since you aren't an economist.
It depends whether you are referring to accounting profits or economic profits. The first should make sense to you, the latter should not since you aren't an economist.
Ouch! Don't tell my research advisor that.
I'm pretty sure that, by the standard definition of economic profit, you make 0 either way in my original case.
It depends whether you are referring to accounting profits or economic profits. The first should make sense to you, the latter should not since you aren't an economist.
Ouch! Don't tell my research advisor that.
I'm pretty sure that, by the standard definition of economic profit, you make 0 either way in my original case.
We wouldn't want to succumb to the soft bigotry of low expectations, now would we?
Besides, every public school student in the United States must, by federal law, be at least proficient in reading and math by 2014. So, why not make them learn economics, too? And string theory, while they're at it.
As my name states, I live in Virginia, and my two daughters have been through the 3rd grade social studies SOL that includes some basic economics.
It's fantastic! Eight year olds can get it. Better than many, many Congressmen and journalists, and bloggers. I loved having these great talks with my kids about opportunity costs. Kids have to decide what to spend their money on, and they also seem to get how it applies to bigger issues like picking battles and waging wars.
Have you tried to do a third grader's homework lately? It is the most difficult thing in the world.
"That's nothing new, or if it is, it's a return to the past. It was the SOL test when I was in elementary school in Fairfax County in the late '80s. I remember a student actually called in the S--- Outta Luck test in front of the teacher, who was, of course, not as amused as we were."
I think you either wrote "80s" by mistake instead of "90s" or you completely made up this memory. The first SOL tests were administered in 1998 — when I, incidentally, was a fifth grader in FCPS.
Prior to the SOLs, Fairfax County (or maybe the whole state, I dunno) administered Program of Studies (or POS) tests. With this unfortunate innitialism, these too must have inspired an obvious scatological nickname
Opportunity cost: woulda, coulda, shoulda; didn't.
The concept assumes you can accurately measure the value of the missed opportunity, so its of very limited use.
I seem to remember the standardized test was called the SCA. It was given in every even number grade.
and re: teaching to the test.
Real life is taught to the test. Just sayin'.
It is very simple. For example, we spend ca. 600 billion per year for military and security, while our opponents that are totally unlikely to attack us spend roughly 100, and our allies spend 300. We could basically go down to 100, and rely on our allies who are closer to putative threats anyway.
Because we decided to spend 500 billions on something unnecessary, we somehow are short of money to buy something useful, e.g. 100 nuclear power stations that These power stations could save natural gas equivalent to 100 million tons of oil. We could run trucks and buses etc. using natural gas rather then imported oil. We could reduce the purchases of oil by 20%, making perhaps a dent in prices as we do it. In one year we would save 100 billion dollars, at least.
Imagine doing something useful every year for 500 billion dollars!
Or it's like the website you write music reviews for gives you a free ticket to see Rilo Kiley at the Echoplex, whereas you'd pay $25 at the door. If you go to the show, it's not free, because your next best alternative was to scalp the ticket and go hang out at The Smell. Your opportunity cost of going to watch some faint indie rock played by former child actors would be whatever you could sell the free ticket for.
Comments closed June 27, 2008.
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Heads in the Sand
Count me among the adults who does not understand the concept of opportunity cost at all.
Posted by Mr. Noah | June 13, 2008 5:39 PM