What I Learned in a Semester of Econ

What I Learned in a Semester of Econ

Last semester I took Principles of Microeconomics because it was required for my major. It was an hour and twenty minute class twice a week that felt like it lasted four days every single time. But after 15 weeks that class not only taught me about perseverance and how to stay awake against my own will but we also talked about the concept of sunk costs. Sunk costs are expenses “that have already been incurred and cannot be recovered.” In econ we talk about this in terms of dollars spent by a firm but I’ve started to realize we encounter sunk costs even if we have absolutely nothing to with a firm.

We invest time, money, and energy into people, careers, places, passions. But when they know longer fit our wants or needs or timing or purpose they can be hard to leave behind. Economics reasons that sunk costs cannot be recovered therefore should not be a part of the decision-making process. They should be ignored. It’s tough to do– to forget about all the  wasted whatever. Maybe impossible. But if you only consider days that happened yet it can be  a useful exercise. If you were starting today, day one what would you do? Invest in what matters to you now instead. It’s not a waste it’s an experience.

The project, the friendship, the job, the relationship, the dream. Because your time is most valuable now and those wasted resources cannot be recovered therefore they are not really wasted. It’s important to learn from the path but not to obsess. Let it go. Because economics says so.