00:01
One of the most basic principles of economics is this idea of tradeoffs and opportunity costs as well as true cost.
00:06
And that's what we're going to be examining here.
00:08
We want to know what this true cost is of going skiing.
00:11
If your friend asked you to go skiing, but you were initially planning on working instead.
00:17
So this true cost of going skiing will be equal to whatever these implicit costs are of skiing, plus any explicit costs that exist by your choice to go skiing.
00:28
So let's examine these in the case that you're planning on working instead.
00:32
So the implicit cost that you incur here is going to be an opportunity cost.
00:37
And the opportunity cost of going skiing here will be wages lost.
00:41
So you would lose wages by going skiing because you would have earned these wages had you chosen to go to work.
00:48
Now, any explicit cost that you're going to end up losing, this is essentially what you pay to go skiing.
00:52
So this could be in rental equipment.
00:56
Suppose you don't have your own skis.
00:57
Well then explicit costs could be included in this cost of rental equipment...