[TESAT 너무쉬운 테샛 1강] 기회비용 (교재p 5~9) |강의 : 윤성종 선생님|

Main ideas and lessons (Opportunity Cost → Economic Cost → Sunk Cost → Exam applications)

1) Opportunity cost: definition and exam relevance

• Opportunity cost is a guaranteed/major exam topic:
  • At least one question is guaranteed, sometimes more than two.
• Core principle:
  • Opportunity cost is “bad” if it is large (because it is a cost).
  • Opportunity cost is “good” if it is small (because “smaller is better”).
• Definition (what you give up):
  • Opportunity cost = what you give up (the sacrificed alternative) to make a choice.
  • It serves as a criterion for decision-making.
• Why it happens in economics:
  • Economics assumes resource scarcity, so choosing one option implies giving up another.
• Occurs in both contexts:
  • Consumption/purchasing decisions (e.g., choosing what to eat).
  • Production/business decisions (e.g., using limited inputs for one product instead of another).

2) When opportunity cost applies (memorization points)

• Opportunity cost applies only when resources are scarce.
• Not applicable to infinite resources (example implied: air).
• Special rule if a resource is used for only one purpose:
  • If a resource can be used for exactly one purpose, then opportunity cost equals the foregone utility from not using it (instructor emphasizes memorizing this rule).
  • Parenthetical placeholders like “[utility]” indicate a utility/foregone benefit concept.

3) Decision criterion: minimize opportunity cost

• People can choose based on salary, but in economics the decision criterion is to:
  • Minimize opportunity cost.
• Rational choice assumption:
  • Economics assumes humans are rational in the sense that they act to minimize opportunity cost as much as possible.

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Key methodology / instruction-style points (as presented)

A) How to identify opportunity cost in practice

1. List the alternatives you are considering (what you could choose).
2. Determine what you actually give up by making the chosen decision.
3. If multiple things are forgone:
   • Opportunity cost equals the greatest (largest value) item among what you give up (not the sum of all forgone items).
4. Ensure the decision involves scarce resources.
5. For correct economic decision-making, choose the option with the smallest opportunity cost.

B) How to compute “economic cost” (explicit + implicit)

• Economic cost = accounting (explicit) cost + implicit cost
  • The instructor stresses that students often mistakenly consider only accounting costs.

Definitions

• Accounting cost (explicit cost):
  • Costs that involve actual money payments or explicitly incurred costs.
• Implicit cost:
  • The value of things you give up by choosing an option (e.g., wages you don’t earn, income you forgo).
• Total opportunity cost corresponds to economic cost:
  • Opportunity cost = explicit cost + implicit cost.

C) How to handle sunk costs (opposite of opportunity cost)

• Sunk cost should NOT be reflected in future decisions because:
  • The money has already been paid and cannot be recovered.
• Exam framing rule:
  • If money was already paid and cannot be recovered, treat it as a sunk cost.
• Important exception the instructor gives:
  • If it is resalable (can be recovered), then it is not a sunk cost.
• Rule of thumb for decision-making:
  • Focus on future costs and future benefits, not past spending.

Common exam-style examples used

• Dating/marriage analogy:
  • Don’t base a future decision on the fact that “7 years already happened/paid.”
• Opera analogy:
  • Leave if it’s boring rather than “trying to get value” from already spent money.
• Steak analogy:
  • Whether it’s rational to leave after paying.
• Deposit/interest analogy:
  • Only consider the interest income relevant to the decision, not the principal already deposited.

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Examples covered (what they were teaching)

1) Food choice example (consumption)

• With 5,000 won, choosing Jajangmyeon means you give up Jjamppong.
• Opportunity cost of Jajangmyeon = Jjamppong you gave up.

2) Production example (restaurant owner)

• Limited inputs (flour/sugar) mean producing either steamed buns or hotteok.
• If producing steamed buns, opportunity cost = hotteok forgone.

3) Salary/occupation choice example (opportunity cost logic)

• The lecture compares choosing based on salary vs choosing based on opportunity cost.
• Key logic:
  • When choosing an option, forgone alternatives include multiple values, but opportunity cost uses the largest forgone value.
  • The “rational choice” corresponds to the option with the smallest opportunity cost, and can match a salary-based pick in the scenario.

4) Park Yoo-chun example (implicit vs explicit)

• Explicit costs: tuition/textbooks (10 million won).
• Implicit costs: foregone salary (20 million won).
• Economic cost / opportunity cost = 10 + 20 = 30 million won.
• Core lesson: do not ignore implicit costs.

5) Mina bakery example (exam-style incorrect reasoning)

• Mina currently earns:
  • 10 million won salary
  • 10 million won rental income (from the shop)
• To open a bakery:
  • Explicit/expected operating cost: 15 million won
  • Implicit costs include forgone salary and forgone rent income (as represented in the lecture’s numeric logic).
• Core lesson:
  • Wrong approach: subtract only explicit accounting costs from revenue and call that profit.
  • Correct approach: use opportunity cost (explicit + implicit).
• Exam emphasis:
  • The instructor marks correct/incorrect options (e.g., “answer = number 3”, “number 4 fails because revenue < opportunity cost”), emphasizing opportunity cost as the criterion.

6) Sunk cost examples + deposit/interest rule

• Already-paid money for surgery/consulting:
  • Do not include it in future decisions.
• Deposit with interest:
  • The principal is sunk-like for the decision horizon; what matters is the foregone interest.
  • Example: 2% of 100 million won → only consider 1 million won.

7) Final integrated numeric exam example (opening a restaurant)

• Includes:
  • Implicit cost (foregone salary)
  • Accounting cost / explicit operating cost (e.g., ingredients 36 million won)
  • Interest on savings (foregone interest)
  • Uses opportunity cost total to decide whether revenue must exceed a threshold.
• Final stated conclusion:
  • To open, total revenue must exceed the computed opportunity cost (e.g., “exceed 100 million won”).
• Sunk cost warning:
  • A prior surgery payment (e.g., 5 million won) is sunk and must not be used to decide.

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Speakers / sources featured

• Speaker/Instructor: 윤성종 선생님 (Yoon Seong-jong)
• Textbook/source referenced: “교재” / textbook pages (mentions p. 5~9, and page 7, page 10 within the lecture)
• Named example characters used in explanations:
  • 박유천 (Park Yoo-chun)
  • 미나 (Mina)
  • 리훈 (Lee Hoon) / referenced in the implicit-cost discussion
  • 박종원 (Mr. Park Jong-won)
• No external interview sources or additional speakers are clearly identified beyond the instructor.