The farmer and the lawyer

When I took my first microeconomics class at UVA, I loved the way the most popular professor at UVA used simple everyday situations to explain basic economic concepts. One of the stories which I still remember to this day was about a farmer and a lawyer. Both had to travel to Washington and wanted to do so the cheapest way possible. The difference was that where the farmer could not afford to take the plane, the lawyer could not afford to drive.

The concept being illustrated was the value of time. The lawyer’s time was valuable and therefore had to take into account the cost of his time in deciding whether to drive or take the plane. I used a very similar analysis last week. In preparation for my out of town trip on Friday to interview at a job fair, I have to decide whether to make the six hour drive (each way) or take a direct flight. Comparing the cost of gas plus that of the overnight hotel stay versus paying through the nose for booking a plane ticket at the last minute, it’s a no brainer. But when I factor in the cost of my time, the choices became much closer. I finally opted to fly. I figured I can do so many important things with the time that I save such as blogging, entertaining various nightmare scenarios of how this internship search will end, or building my portfolio of friends on Facebook.