The question, as posed in exactly which Econ class I cannot recall, goes something like this:

"Bill Gates earns (some ridiculous amount of money) every day. It takes him one second to pick up money he finds on the ground. How large a pile of money does there have to be before Bill Gates would earn more by picking up the money than by ignoring it?"

I, along with every other student in that Econ class, got the answer wrong. Flush with our newfound understanding of marginal costs and benefits, we performed the fairly simple operation of dividing that ridiculous sum of money by the number of seconds in a normal day, and added a penny. Simple, right? And the prof told us we were correct, so we happily squidged along in our smugness (and awe of how rich Bill Gates is, that he actually should not* pick up a pile of twenty thousand dollars, because he'd lose money by doing so).

Oh, what fools we were. What we all (and the professor) failed to realize, is that Bill Gates does not stop earning that ridiculous amount of money if he stops to pick up the $20K pile of cash, or if he drops by a Jack in the Box and orders a Sourdough Jack, or if he goes to bed and sleeps away eight or so hours. That money just accumulates for him.

The correct answer to the question is, picking up one single penny on the ground makes Bill Gates richer by a penny, just as it does for you, me, or the five-year-old around the corner.

The lesson? Analyze a question for its content, not just for its structure. Think, Ubu, think! Good dog.

*I believe I used this exact phraseology at the time, to impress one of my acquaintances with how cool economics, or I, or maybe even the inestimable BillG, was. God, I must have been insufferable**.

**Hard to believe, I know.
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