Suppose you buy a luxury item, like a golden ring with brilliants. You pay a lot of money, but your money isn’t going to disappear; it is redistributed between traders, jewelers, miners, etc. The only thing that’s lost is the total effort required to produce that ring, which often costs lesser by an order of magnitude. And if the item you buy is actually useful, the wasted effort is even lower.
The cost of having kids is so high for you, because you will likely raise well-educated children with high intelligence, which are valuable assets to our society; likely being net positive, after all. Needless to say, actually ensuring that these poor children in Africa will end up that well, rather than, say, die of starvation the next year, is going to cost you much more than 800$. So you pay for quality here.
Such cost calculations are wildly overestimated.
Suppose you buy a luxury item, like a golden ring with brilliants. You pay a lot of money, but your money isn’t going to disappear; it is redistributed between traders, jewelers, miners, etc. The only thing that’s lost is the total effort required to produce that ring, which often costs lesser by an order of magnitude. And if the item you buy is actually useful, the wasted effort is even lower.
The cost of having kids is so high for you, because you will likely raise well-educated children with high intelligence, which are valuable assets to our society; likely being net positive, after all. Needless to say, actually ensuring that these poor children in Africa will end up that well, rather than, say, die of starvation the next year, is going to cost you much more than 800$. So you pay for quality here.
Sounds like a mistake a native Russian speaker would make :).
You chose the worst possible example. Extreme margins mask the issue.
At equilibrium, the price equals the marginal cost; sure, it is more than the average cost, but I can’t see why the latter is relevant.
And the effort required to earn the money to buy the ring is also wasted.
No, it’s not. You have produced (hopefully) valuable goods or services; why they are wasted, from the viewpoint of society?