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Hey everyone, today we're solving problem number one from chapter one of the textbook, which deals with opportunity cost.
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So what is opportunity cost? well, essentially, it's what you have to give up to acquire something else.
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So it's what is sacrificed to do or acquire something else.
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Now, how does this relate to the definition of economics? well, in the definition of economics, we're dealing with the idea of scarcity.
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So there's a scarcity of resources in the economy.
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And in terms of opportunity cost, the condition of scarcity creates opportunity costs.
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Because there's not as many resources, you're going to have to pick and choose which ones you would sacrifice in order to acquire some other ones that you find more valuable for yourself.
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So if there was no scarcity, there would be no need to sacrifice.
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I want to think about it in that perspective as well.
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Like if we are in an ideal world and there was no scarcity in the economy, there would be no need to sacrifice goods or services in general.
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All right.
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So that is kind of the rationale for how it connects to economics...