Recently the price of tea went up from $1.59 to $2.12 at my favorite pitstop, Cafe Ambrosia. Seeing as how the price hadn’t been hiked in 2 years, they were entitled to charge a little more. Nonetheless, there’s a subtle psychological barrier that makes it unappealing to buy a pint glass of tea for over two bucks, a barrier that wasn’t present when the same product cost a buck and change. It’s only a 53 cent difference. But that 53 cents will buy, for example, that day’s copy of the Ann Arbor News or Detroit Free Press (if I’m inclined to spend it on either, and yes, I recognize that I spend way too much spare change on tree-based news delivery sources). On the other hand, while tea still costs $1.86 at nearby Espresso Royale, and the taste of the tea is no different, the experience at Espresso Royale is not as appealing. The phrase “opportunity cost” springs to mind … and I realize that I spent way too much time immersed in econ my last term at SI. I’m just glad my caffeine habit is fairly bare-bones: I’ve never liked coffee, and thus have no compulsion to buy fancy cappuccinos or lattes.
