The Keystone Economic Principles related to this post are as follows:
1. We all make choices.
3. All choices have consequences.
Neal Templin's "Cheapskate" column in The Wall Street Journal is rapidly becoming a "must-read" for me. He is entertaining, informative, and his experiences connect. Today's column discusses some of the simple decisions we make, never thinking that they will affect our finances. But ultimately they have a higher cost than we thought (or, in some cases, didn't think). His first example illustrates a choice that many people would have trouble making using economic principles, but it still resonates. The others are clearer.
I would suggest this can be the basis for discussion in a personal finance course - what choices do we make without thinking about the consequences? What time-frames do we use in making choices?
But I also think a basic economics course can benefit from this story, because the choices made are, with one exception, outside the realm of decision-making as our students frame it in class. And this encourages them to think outside the box – apply the “economic way of thinking.”
I have an example that fits this category. Back when I still worked in Chicago, I was rushing to catch a train in order to be at the Federal Reserve Bank to hear Chairman Greenspan address the Bank staff. As I boarded the train, I stumbled on the stairs and my briefcase fell outside. Unfortunately, as I fell, the "door closing" chime sounded. I quickly stood up and started back down the stairs to retrieve my briefcase, but instead I tripped, fell out of the car onto the platform, and broke my wrist. I often think about what I would have done differently - leave the briefcase - miss the train. But the cost was definitely higher than just missing a speech.
Do you have a decision that would fit in this category that you use with your students? Would you mind sharing? I look forward to your comments.