[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.25,0:00:01.39,Default,,0000,0000,0000,,♪ [music] ♪
Dialogue: 0,0:00:03.18,0:00:04.56,Default,,0000,0000,0000,,♪ [music] ♪
Dialogue: 0,0:00:05.70,0:00:08.16,Default,,0000,0000,0000,,- [Tyler] Once you master \Nthe economic way of thinking,
Dialogue: 0,0:00:08.31,0:00:10.64,Default,,0000,0000,0000,,you'll see the world \Nin a very different way.
Dialogue: 0,0:00:11.63,0:00:14.88,Default,,0000,0000,0000,,Two fundamental economic concepts \Nare everywhere you look --
Dialogue: 0,0:00:15.12,0:00:17.92,Default,,0000,0000,0000,,opportunity cost,
Dialogue: 0,0:00:19.93,0:00:21.41,Default,,0000,0000,0000,,and tradeoffs.
Dialogue: 0,0:00:24.20,0:00:27.03,Default,,0000,0000,0000,,Let's start with opportunity cost.
Dialogue: 0,0:00:27.41,0:00:29.28,Default,,0000,0000,0000,,At this busy coffee shop,
Dialogue: 0,0:00:30.12,0:00:33.09,Default,,0000,0000,0000,,opportunity costs lie \Nbehind every decision.
Dialogue: 0,0:00:34.28,0:00:37.82,Default,,0000,0000,0000,,Like for Jenny -- she's here \Nfor her third date with Adam.
Dialogue: 0,0:00:40.98,0:00:42.67,Default,,0000,0000,0000,,Was that a good decision?
Dialogue: 0,0:00:43.15,0:00:46.46,Default,,0000,0000,0000,,After all, economics is \Nall about studying decisions.
Dialogue: 0,0:00:46.56,0:00:49.67,Default,,0000,0000,0000,,Making a good decision is \Nabout comparing the benefits
Dialogue: 0,0:00:49.67,0:00:51.96,Default,,0000,0000,0000,,of that decision to the costs.
Dialogue: 0,0:00:52.42,0:00:54.03,Default,,0000,0000,0000,,The obvious costs for this date,
Dialogue: 0,0:00:54.03,0:00:57.70,Default,,0000,0000,0000,,for Jenny, were the Uber ride\Nshe paid for to get here,
Dialogue: 0,0:00:57.79,0:01:01.18,Default,,0000,0000,0000,,and her grande chai tea latte\Nwith whole milk.
Dialogue: 0,0:01:01.48,0:01:03.09,Default,,0000,0000,0000,,But what's missing?
Dialogue: 0,0:01:03.09,0:01:04.64,Default,,0000,0000,0000,,Her opportunity cost.
Dialogue: 0,0:01:05.05,0:01:09.33,Default,,0000,0000,0000,,Opportunity cost means the value \Nof the next best alternative.
Dialogue: 0,0:01:09.47,0:01:12.96,Default,,0000,0000,0000,,For instance, instead of going\Non her third date with Adam,
Dialogue: 0,0:01:13.21,0:01:16.48,Default,,0000,0000,0000,,Jenny could've been binge watching\Nher favorite tv show.
Dialogue: 0,0:01:16.96,0:01:19.42,Default,,0000,0000,0000,,She might've been \Non a first date instead,
Dialogue: 0,0:01:19.42,0:01:20.56,Default,,0000,0000,0000,,with Roman.
Dialogue: 0,0:01:20.67,0:01:22.74,Default,,0000,0000,0000,,Or she might've been \Nhaving breakfast
Dialogue: 0,0:01:22.74,0:01:24.42,Default,,0000,0000,0000,,with her very sweet sister.
Dialogue: 0,0:01:26.07,0:01:27.62,Default,,0000,0000,0000,,Let's say her next best option
Dialogue: 0,0:01:27.62,0:01:29.69,Default,,0000,0000,0000,,would've been \Nbreakfast with her sister.
Dialogue: 0,0:01:30.32,0:01:32.67,Default,,0000,0000,0000,,Does the benefit \Nof this third date with Adam
Dialogue: 0,0:01:32.67,0:01:34.73,Default,,0000,0000,0000,,outweigh the opportunity cost?
Dialogue: 0,0:01:35.26,0:01:38.30,Default,,0000,0000,0000,,It might seem strange \Nto think this way about romance,
Dialogue: 0,0:01:38.30,0:01:41.100,Default,,0000,0000,0000,,and it doesn't mean that it's \Nabout calculating every decision
Dialogue: 0,0:01:41.100,0:01:43.56,Default,,0000,0000,0000,,down to the last penny.
Dialogue: 0,0:01:43.74,0:01:46.94,Default,,0000,0000,0000,,Nonetheless, Jenny's time, \Nattention and energy --
Dialogue: 0,0:01:46.94,0:01:48.28,Default,,0000,0000,0000,,those are scarce.
Dialogue: 0,0:01:51.08,0:01:53.85,Default,,0000,0000,0000,,And if she doesn't consider \Nthe alternatives at all,
Dialogue: 0,0:01:53.85,0:01:55.93,Default,,0000,0000,0000,,she might be wasting \Nparts of her life.
Dialogue: 0,0:01:58.68,0:02:01.56,Default,,0000,0000,0000,,There's another \Nfundamental related concept
Dialogue: 0,0:02:01.56,0:02:03.75,Default,,0000,0000,0000,,from economics -- 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: 0,0:02:09.27,0:02:11.98,Default,,0000,0000,0000,,Adding sprinklers can \Nmake it safer during a fire,
Dialogue: 0,0:02:12.07,0:02:15.02,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 would \Nthe coffee be without them?
Dialogue: 0,0:02:21.29,0:02:24.46,Default,,0000,0000,0000,,In a world of scarce resources,\None typically has to choose.
Dialogue: 0,0:02:25.07,0:02:28.14,Default,,0000,0000,0000,,There's a tradeoff -- \Nsafer buildings cost more,
Dialogue: 0,0:02:28.14,0:02:30.91,Default,,0000,0000,0000,,but that means the coffee can \Nbe more expensive.
Dialogue: 0,0:02:37.89,0:02:40.80,Default,,0000,0000,0000,,The line is out the door here.
Dialogue: 0,0:02:41.58,0:02:45.95,Default,,0000,0000,0000,,Perhaps the owner has considered\Nopening a second location.
Dialogue: 0,0:02:47.33,0:02:50.13,Default,,0000,0000,0000,,As the building code, however,\Nbecomes more stringent,
Dialogue: 0,0:02:50.13,0:02:53.42,Default,,0000,0000,0000,,the cost of opening \Nan additional location goes up.
Dialogue: 0,0:02:53.72,0:02:57.77,Default,,0000,0000,0000,,It's not just the direct \Nmonetary costs of paying
Dialogue: 0,0:02:57.77,0:02:59.44,Default,,0000,0000,0000,,for things like sprinklers.
Dialogue: 0,0:02:59.44,0:03:03.50,Default,,0000,0000,0000,,It's also the opportunity costs\Nof the extra time and effort
Dialogue: 0,0:03:03.50,0:03:07.74,Default,,0000,0000,0000,,to file permits, manage the work\Nand schedule inspections.
Dialogue: 0,0:03:10.01,0:03:12.98,Default,,0000,0000,0000,,A more stringent building code \Nmeans a higher cost
Dialogue: 0,0:03:12.98,0:03:14.91,Default,,0000,0000,0000,,for opening up new businesses.
Dialogue: 0,0:03:18.69,0:03:21.02,Default,,0000,0000,0000,,And in turn, \Nthat higher cost can mean
Dialogue: 0,0:03:21.29,0:03:23.51,Default,,0000,0000,0000,,that fewer new businesses \Nget opened.
Dialogue: 0,0:03:30.00,0:03:34.18,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: 0,0:03:45.15,0:03:46.64,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: 0,0:03:49.01,0:03:50.23,Default,,0000,0000,0000,,healthcare,
Dialogue: 0,0:03:55.13,0:03:56.38,Default,,0000,0000,0000,,food,
Dialogue: 0,0:04:02.26,0:04:03.90,Default,,0000,0000,0000,,the environment.
Dialogue: 0,0:04:08.75,0:04:10.65,Default,,0000,0000,0000,,education.
Dialogue: 0,0:04:14.91,0:04:17.01,Default,,0000,0000,0000,,One more decision to consider --
Dialogue: 0,0:04:17.32,0:04:19.12,Default,,0000,0000,0000,,if you're a teacher, \Nshould you spice up
Dialogue: 0,0:04:19.12,0:04:22.78,Default,,0000,0000,0000,,your economics class \Nby 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: 0,0:04:28.84,0:04:31.34,Default,,0000,0000,0000,,Well, YouTube is full \Nof entertaining videos,
Dialogue: 0,0:04:31.34,0:04:32.38,Default,,0000,0000,0000,,[cat meows]
Dialogue: 0,0:04:32.38,0:04:35.22,Default,,0000,0000,0000,,but please, of course, consider\Nthe opportunity costs.