00:01
So here we have a question about opportunity cost, and we should start them by reminding ourselves of the definition of opportunity cost, which is simply the value of the next best alternative, right? opportunity cost is what giving up when you choose to do something with the land, right? it is what you are giving up when you choose any action, right? when you go to college, it's what you're giving up by not going to college, right? extra time, the pain is not of studying, the hours you could have worked, right? so we can immediately see that options one and two here are incorrect, right? it doesn't matter how varied the uses are, right? there could be 50 million or 80 million or three uses of the land, but all that is important is the value of the best one, because we can only use the land for one thing at a time.
00:47
We can't use the land for 15 things at a time.
00:50
And so the fact that you can do 15 things with it is not really a relevant concern, right? you only can do one thing with it.
00:56
So the cost of doing a particular thing is what you're giving up, what you could have done instead.
01:01
And that's only one thing.
01:03
So it's clearly three or four because they make almost direct reference to this definition of opportunity cost, right? is the opportunity cost greater in nyc because the alternative are more valuable or greater in the small city because the alternatives are more valuable? well, almost certainly it's going to be c here, right? the alternatives are more valuable in new york city.
01:23
Land is more expensive...