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Listen to an Academic Talk Test #003
Listen to an Academic Talk
1. What is the main purpose of the talk?
A) To compare different economic theories
B) To explain a core concept in economics
C) To give advice on personal finance
D) To discuss business investment strategies
2. In the professor's example, what is the opportunity cost of going to the concert?
A) The money paid for the ticket
B) The time spent at the concert
C) The enjoyment of the music
D) The potential for a better exam grade
3. What does the professor imply about making choices?
A) The best choices always involve the lowest monetary cost.
B) Every choice involves sacrificing an alternative benefit.
C) Businesses and individuals evaluate costs very differently.
D) Most people do not understand opportunity cost.
4. Why does the professor mention businesses?
A) To show the concept applies in different contexts
B) To criticize how companies make decisions
C) To provide a complex mathematical example
D) To introduce the next topic of the lecture
Professor: In economics, we constantly analyze choices. A fundamental concept for this analysis is "opportunity cost." It's a simple but powerful idea that goes beyond the price tag of an item.
The opportunity cost is the value of the next-best alternative that you give up when you make a decision. Let's say you have an evening free. You can either study for an exam or go to a concert. If you choose the concert, the price of the ticket is the direct monetary cost. But the opportunity cost is the better grade you might have earned by studying. That potential better grade is the forgone alternative.
This concept isn't limited to individuals. Businesses use it to decide whether to invest in new equipment or hire more staff. The value of the option they don't choose is the opportunity cost. It forces us to recognize that every decision has a hidden trade-off.
The opportunity cost is the value of the next-best alternative that you give up when you make a decision. Let's say you have an evening free. You can either study for an exam or go to a concert. If you choose the concert, the price of the ticket is the direct monetary cost. But the opportunity cost is the better grade you might have earned by studying. That potential better grade is the forgone alternative.
This concept isn't limited to individuals. Businesses use it to decide whether to invest in new equipment or hire more staff. The value of the option they don't choose is the opportunity cost. It forces us to recognize that every decision has a hidden trade-off.
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