Quote:
Originally Posted by lawcat
I think that you may be confusing opportunity cost of goods with opportunity cost of money. Goods are just goods. Money, on the other hand, is labor.
Opportunity cost of goods is embedded in the price of goods. Goods are sold in today's market for today's money, and that is the end of it. If goods have useful life over one year, then goods can be depleted or depreciated over the life of goods. (which is not the discount rate).
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The example Haech gave was of a forest. That's agriculture. My late brother traded agriculture futures on the CBoT for several years. He tried to explain to me how that worked but didn't have the time. He was one of those guys who ran a string of grain elevators in Kansas and dominated the feed that went to the Arkansas chicken farms while working the grain futures, so his heart gave out when he turned 60. I was always fascinated that part of his control of grain futures lay in the rolling stock he kept around in Kansas, Missouri, Arkansas, and Oklahoma, but I never understood exactly how he did what he did.
I think that's what Haech's question is about. If not, I'll ask my question somewhere else.
Thanks.
--lemit
