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Listen to an Academic Talk Test #083
Listen to an Academic Talk
1. What is the professor's main purpose?
A) To define an important economic principle
B) To compare different business strategies
C) To criticize how people spend their time
D) To explain how to calculate monetary costs
2. According to the professor, what is the opportunity cost of studying?
A) The money spent on textbooks
B) The time it takes to prepare for an exam
C) The enjoyment of a sacrificed activity
D) The information learned from a TV show
3. What can be inferred about making a choice between two equally valuable options?
A) The opportunity cost would not exist
B) The decision would be easy to make
C) The opportunity cost would be high
D) One option should be chosen randomly
4. Why does the professor mention a business investing in a factory?
A) To complain about corporate spending
B) To show the concept applies to large-scale decisions
C) To argue that marketing is a better investment
D) To give an example of a poor financial choice
Professor: When we talk about the cost of something, we usually think of the price tag. But in economics, we have a broader concept called opportunity cost. The opportunity cost of any decision is the value of the next-best alternative you had to give up. It's the opportunity you lost.
For example, you have an hour to either study for an exam or watch your favorite TV show. If you choose to study, the opportunity cost isn't money—it's the enjoyment you would have gotten from the show.
For a business, if it invests one million dollars in a new factory, the opportunity cost is whatever else it could have done with that money, like investing in a marketing campaign. Understanding this concept is fundamental because it reveals the true cost of every choice we make, forcing us to consider what we're sacrificing.
For example, you have an hour to either study for an exam or watch your favorite TV show. If you choose to study, the opportunity cost isn't money—it's the enjoyment you would have gotten from the show.
For a business, if it invests one million dollars in a new factory, the opportunity cost is whatever else it could have done with that money, like investing in a marketing campaign. Understanding this concept is fundamental because it reveals the true cost of every choice we make, forcing us to consider what we're sacrificing.
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