Smile of the Day

Life is getting much too serious, yes? Who doesn't need a daily smile?




Friday, November 28

The growth of wealth

An experienced economist and a newbie in the field are walking together through the cow pasture. In the way of all cow pastures, it is a bit of a minefield. A bit mischievously, the older economist suddenly says, "If you jump onto that one deliberately, I will give you $20,000."

Hmm, a lot of money, that. The newbie runs his optimisation problem and figures out he would be better off if he takes the bet, so he goes ahead and jumps, and gets all splattered.

Just a little later they run into another cow patty, and the newbie decides to turn the tables: "Now, if YOU jump onto that one, I will give YOU $20,000."

The experienced economist runs his evaluation quickly, and jumps, and now he is all splattered too.

After a while the newbie starts thinking aloud, "Listen, we both have the same amount of money we had before, but just look at us! I don't see us being better off."

"Well," says the experienced economist, "I guess part of that is true, but you overlooked the fact that we havve been just involved in $40,000 of trade."

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