I remember as a kid, about 12, loaning my less-mathematically-astute younger brother $4, at 10% interest per day, compounded daily. I remember gloating about how much money he was going to owe me. I was going to be RICH, mwuahh hah hah!!
My Mom told that loan sharking was illegal, and my Dad told me that contracts with minors were not enforceable. My brother I think borrowed some money from one of his friends (on much more favorable terms), paid me back with one day’s interest, and never borrowed money from me again.
There have been multiple egregious examples of this fallacy with respect to pandemic policy. The complete lack of rational cost benefit analysis (across the political spectrum) for the various measures was truly disheartening.
But to give a less politically charged example: Locally, in response to drought conditions, some restaurants announced they would only bring glasses of water to the table, on request. Now, this might make some sense in terms of reducing labor, although the extra work of having to ask everyone, and possibly bring out additional glasses later, probably cancels this out. But for reducing water usage, this is just silly. Let’s do some math:
Total water usage in US is about 1000 gal/person-day (including domestic, agricultural and industrial uses). So, assuming 50% of patrons leave their 12 oz glass of water untouched, you are reducing the daily water consumption of restaurant patrons by less than 0.005%. Of course, it also takes water to wash said glass—it can vary a lot, but 18 oz of water would be a reasonable estimate (assuming an automatic commercial dishwater). That gets us up around 0.012%, or the water you get from running the faucet in the sink for 5-10 seconds.