[Script Info]
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[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:02.78,0:00:04.56,Default,,0000,0000,0000,,♪ [music] ♪
Dialogue: 0,0:00:05.80,0:00:08.41,Default,,0000,0000,0000,,- [Tyler] Once you master \Nthe economic way of thinking,
Dialogue: 0,0:00:08.41,0:00:10.77,Default,,0000,0000,0000,,you'll see the world \Nin a very different way.
Dialogue: 0,0:00:11.74,0:00:14.88,Default,,0000,0000,0000,,Two fundamental economic concepts \Nare everywhere you look:
Dialogue: 0,0:00:16.40,0:00:17.96,Default,,0000,0000,0000,,opportunity cost
Dialogue: 0,0:00:20.00,0:00:21.41,Default,,0000,0000,0000,,and tradeoffs.
Dialogue: 0,0:00:24.59,0:00:27.03,Default,,0000,0000,0000,,Let's start with opportunity cost.
Dialogue: 0,0:00:27.69,0:00:29.40,Default,,0000,0000,0000,,At this busy coffee shop,
Dialogue: 0,0:00:30.21,0:00:33.09,Default,,0000,0000,0000,,opportunity costs\Nlie behind every decision.
Dialogue: 0,0:00:34.28,0:00:38.01,Default,,0000,0000,0000,,Like for Jenny -- she's here \Nfor her third date with Adam.
Dialogue: 0,0:00:41.26,0:00:42.89,Default,,0000,0000,0000,,Was that a good decision?
Dialogue: 0,0:00:42.89,0:00:43.90,Default,,0000,0000,0000,,After all,
Dialogue: 0,0:00:43.90,0:00:46.68,Default,,0000,0000,0000,,economics is all about\Nstudying decisions.
Dialogue: 0,0:00:46.68,0:00:49.78,Default,,0000,0000,0000,,Making a good decision\Nis about comparing the benefits
Dialogue: 0,0:00:49.78,0:00:51.96,Default,,0000,0000,0000,,of that decision to the costs.
Dialogue: 0,0:00:52.26,0:00:54.92,Default,,0000,0000,0000,,The obvious costs\Nfor this date, for Jenny,
Dialogue: 0,0:00:54.92,0:00:57.40,Default,,0000,0000,0000,,were the Uber ride\Nshe paid for to get here
Dialogue: 0,0:00:58.26,0:01:01.48,Default,,0000,0000,0000,,and her grande chai tea latte\Nwith whole milk.
Dialogue: 0,0:01:01.83,0:01:03.09,Default,,0000,0000,0000,,But what's missing?
Dialogue: 0,0:01:03.09,0:01:04.66,Default,,0000,0000,0000,,Her opportunity cost.
Dialogue: 0,0:01:05.46,0:01:09.67,Default,,0000,0000,0000,,Opportunity cost means the value \Nof the next best alternative.
Dialogue: 0,0:01:09.67,0:01:13.30,Default,,0000,0000,0000,,For instance, instead of going\Non her third date with Adam,
Dialogue: 0,0:01:13.30,0:01:16.48,Default,,0000,0000,0000,,Jenny could've been binge watching\Nher favorite TV show.
Dialogue: 0,0:01:16.95,0:01:19.25,Default,,0000,0000,0000,,She might have been \Non a first date instead,
Dialogue: 0,0:01:19.25,0:01:20.78,Default,,0000,0000,0000,,with Roman.
Dialogue: 0,0:01:20.78,0:01:22.74,Default,,0000,0000,0000,,Or she might have been \Nhaving breakfast
Dialogue: 0,0:01:22.74,0:01:24.42,Default,,0000,0000,0000,,with her very sweet sister.
Dialogue: 0,0:01:25.89,0:01:27.62,Default,,0000,0000,0000,,Let's say her next best option
Dialogue: 0,0:01:27.62,0:01:29.80,Default,,0000,0000,0000,,would have been \Nbreakfast with her sister.
Dialogue: 0,0:01:30.32,0:01:32.76,Default,,0000,0000,0000,,Does the benefit \Nof this third date with Adam
Dialogue: 0,0:01:32.76,0:01:34.73,Default,,0000,0000,0000,,outweigh the opportunity cost?
Dialogue: 0,0:01:35.26,0:01:38.38,Default,,0000,0000,0000,,It might seem strange \Nto think this way about romance,
Dialogue: 0,0:01:38.38,0:01:39.39,Default,,0000,0000,0000,,and it doesn't mean
Dialogue: 0,0:01:39.39,0:01:42.09,Default,,0000,0000,0000,,that it's about calculating\Nevery decision
Dialogue: 0,0:01:42.09,0:01:43.88,Default,,0000,0000,0000,,down to the last penny.
Dialogue: 0,0:01:43.88,0:01:47.11,Default,,0000,0000,0000,,Nonetheless, Jenny's time, \Nattention, and energy --
Dialogue: 0,0:01:47.11,0:01:48.33,Default,,0000,0000,0000,,those are scarce.
Dialogue: 0,0:01:51.25,0:01:53.94,Default,,0000,0000,0000,,And if she doesn't consider \Nthe alternatives at all,
Dialogue: 0,0:01:53.94,0:01:55.92,Default,,0000,0000,0000,,she might be wasting \Nparts of her life.
Dialogue: 0,0:01:58.79,0:02:02.84,Default,,0000,0000,0000,,There's another fundamental\Nrelated concept from economics:
Dialogue: 0,0:02:02.84,0:02:03.90,Default,,0000,0000,0000,,tradeoffs.
Dialogue: 0,0:02:04.58,0:02:06.94,Default,,0000,0000,0000,,Take these sprinklers \Nin the ceiling of the coffee shop,
Dialogue: 0,0:02:06.94,0:02:08.00,Default,,0000,0000,0000,,for example.
Dialogue: 0,0:02:09.27,0:02:12.21,Default,,0000,0000,0000,,Adding sprinklers\Ncan make it safer during a fire,
Dialogue: 0,0:02:12.21,0:02:15.08,Default,,0000,0000,0000,,but they also can cost \Na lot of money to install.
Dialogue: 0,0:02:16.68,0:02:19.99,Default,,0000,0000,0000,,How much cheaper\Nwould the coffee be without them?
Dialogue: 0,0:02:20.70,0:02:24.46,Default,,0000,0000,0000,,In a world of scarce resources,\None typically has to choose.
Dialogue: 0,0:02:25.07,0:02:26.21,Default,,0000,0000,0000,,There's a tradeoff --
Dialogue: 0,0:02:26.21,0:02:28.14,Default,,0000,0000,0000,,safer buildings cost more,
Dialogue: 0,0:02:28.14,0:02:30.91,Default,,0000,0000,0000,,but that means the coffee\Ncan be more expensive.
Dialogue: 0,0:02:38.22,0:02:40.80,Default,,0000,0000,0000,,Hmm, the line is at the door here.
Dialogue: 0,0:02:41.98,0:02:45.64,Default,,0000,0000,0000,,Perhaps the owner has considered\Nopening a second location.
Dialogue: 0,0:02:47.64,0:02:50.38,Default,,0000,0000,0000,,As the building code, however,\Nbecomes more stringent,
Dialogue: 0,0:02:50.38,0:02:53.42,Default,,0000,0000,0000,,the cost of opening \Nan additional location goes up.
Dialogue: 0,0:02:54.36,0:02:57.40,Default,,0000,0000,0000,,It's not just the direct \Nmonetary costs
Dialogue: 0,0:02:57.40,0:02:59.71,Default,,0000,0000,0000,,of paying for things\Nlike sprinklers,
Dialogue: 0,0:02:59.71,0:03:03.74,Default,,0000,0000,0000,,it's also the opportunity costs\Nof the extra time and effort
Dialogue: 0,0:03:03.74,0:03:07.74,Default,,0000,0000,0000,,to file permits, manage the work,\Nand schedule inspections.
Dialogue: 0,0:03:09.80,0:03:13.14,Default,,0000,0000,0000,,A more stringent building code \Nmeans a higher cost
Dialogue: 0,0:03:13.14,0:03:14.97,Default,,0000,0000,0000,,for opening up new businesses.
Dialogue: 0,0:03:18.76,0:03:21.02,Default,,0000,0000,0000,,And in turn, \Nthat higher cost can mean
Dialogue: 0,0:03:21.41,0:03:23.51,Default,,0000,0000,0000,,that fewer new businesses \Nget opened.
Dialogue: 0,0:03:30.00,0:03:33.50,Default,,0000,0000,0000,,What's the right tradeoff\Nbetween making buildings safer...
Dialogue: 0,0:03:38.28,0:03:40.93,Default,,0000,0000,0000,,and making it easier \Nto launch new businesses?
Dialogue: 0,0:03:44.99,0:03:46.64,Default,,0000,0000,0000,,Once you see these tradeoffs,
Dialogue: 0,0:03:46.64,0:03:48.50,Default,,0000,0000,0000,,you'll find them \Neverywhere you look:
Dialogue: 0,0:03:49.26,0:03:50.34,Default,,0000,0000,0000,,healthcare,
Dialogue: 0,0:03:55.13,0:03:56.13,Default,,0000,0000,0000,,food,
Dialogue: 0,0:04:02.02,0:04:03.25,Default,,0000,0000,0000,,the environment,
Dialogue: 0,0:04:08.75,0:04:09.88,Default,,0000,0000,0000,,education.
Dialogue: 0,0:04:14.98,0:04:16.78,Default,,0000,0000,0000,,One more decision to consider:
Dialogue: 0,0:04:17.16,0:04:18.31,Default,,0000,0000,0000,,if you're a teacher,
Dialogue: 0,0:04:18.31,0:04:20.77,Default,,0000,0000,0000,,should you spice up\Nyour economics class
Dialogue: 0,0:04:20.77,0:04:22.78,Default,,0000,0000,0000,,by checking out our free unit plan
Dialogue: 0,0:04:22.78,0:04:24.42,Default,,0000,0000,0000,,that uses this video?
Dialogue: 0,0:04:24.99,0:04:28.37,Default,,0000,0000,0000,,If you're a learner, \Nshould you watch another MRU video?
Dialogue: 0,0:04:28.84,0:04:31.30,Default,,0000,0000,0000,,Well, YouTube is full \Nof entertaining videos,
Dialogue: 0,0:04:31.30,0:04:32.30,Default,,0000,0000,0000,,[cat meows]
Dialogue: 0,0:04:32.30,0:04:35.22,Default,,0000,0000,0000,,but please, of course, \Nconsider the opportunity costs.
Dialogue: 0,0:04:35.59,0:04:37.04,Default,,0000,0000,0000,,♪ [music] ♪