Teaching Economics with Media
This KAYAK advertisement showcases a person who insists on manually handling tasks, including booking travel, despite acknowledging it’s not the most efficient method. He thinks he can do everything the best (absolute advantage), but fails to recognize that people can be better off when they focus on their comparative advantage instead.
Thanks to John Kruggel for posting this clip on Twitter/X!
Disney’s Joseph: King of Dreams is based on the Biblical story story of Jacob and his twelve sons, with a particular focus on Joseph, Jacob’s favorite son. Joseph’s privileged status, marked by a special coat given to him by Jacob, stirs deep jealousy among his brothers. This animosity intensifies after Joseph shares dreams that symbolize his future dominance over his family.
This scene highlights how Jacob’s brothers are motivated by envy and the desire for profit. They seize an opportunity to rid themselves of Joseph. In a calculated move, they decide to sell Joseph into slavery, a practice institutionalized in their society, gain profit. This decision reflects not only their personal resentment but also a profit motive, as they benefit materially from selling their brother. Their actions are facilitated by the existence of slavery as an institution within their society, which provides them with the means to translate their malicious intent into a profitable outcome.
In the Biblical story of Noah’s Ark, God decides to reset creation, sparing only Noah, his family, and pairs of animals in an ark. This decision to start anew instead of persisting in a flawed creation illustrates His ability to avoid the sunk cost fallacy, where one refrains from continuing a venture due to past investments.
‘Evan Almighty’ modernizes this theme. Evan Baxter (Steve Carell) is instructed by God (Morgan Freeman) to build an ark amid skepticism. Like God’s decision in Noah’s Ark, Evan’s choice to build the ark, disregarding past norms and expectations, mirrors the economic principle of evaluating future potential over past costs, exemplifying the avoidance of sunk costs.
The Oreo cookie may be the best cookie of all time. Comedian Gary Gulman would agree. In this standup session, Gulman highlights the various ways that Oreos have innovated their product and even provided double the filling for no extra cost.
In the second part of the joke, Gulman highlights the ways that Oreos have differentiated their products in order to compete with other cookies. You never know what that little cookie is up to until you stop by on your way through the grocery store:
Thanks to Michael Lucas for the clip suggestion!
Price tags are an interesting phenomenon when you consider that it wasn’t all that long ago that negotiating in stores was a common practice. Price tags improve efficiency because they present full information for customers who don’t have to worry about negotiating, but it doesn’t mean that the price is the most efficient price. There are markets all around the world that display one price, but involve sellers willing to negotiate. Jia Jiang finds out that Target is not one of those markets.
Thanks to Bryan Sloss for sending in this clip!
In 50 First Dates, Henry sets his heart on romancing Lucy. The problem? She has short-term memory loss and can’t ever remember anything that happened the day before. Every morning, Henry has to woo her again.
As this pattern is established, this scene shows Henry and Lucy kissing at the end of many different days, only to be followed by Lucy saying (every time), “Nothing beats a first kiss.” Henry, of course, knows that this is not the first kiss anymore. In terms of diminishing marginal utility, the first kiss (at least to Lucy) provides the highest level of marginal utility. Each kiss after that may provide positive marginal utility, but it won’t be as high as the first one.
Sadly, Henry is aware that this is not his first kiss with Lucy, and so he will experience diminishing marginal returns for each additional kiss that he receives.
Thanks to Amanda Mandzik for the clip suggestion and summary!
In The Sandlot, neighborhood kids play an “endless dream game” all summer long. There are two kids on opposite ends of the spectrum when it comes to baseball talent and natural ability. Benny is the superstar on the local sandlot team. He has a clear absolute advantage over all the others in running, hitting, throwing, and catching. On the other hand, Scotty (nicknamed “Smalls”) possesses book smarts but is clueless about baseball. He can’t throw or catch and has little knowledge about baseball in general.
Benny uses his absolute advantage as an opportunity to train Smalls on how to catch and throw. Investing in training uses resources (like time and energy), but has the potential to payoff in the future. It takes Benny and the rest of the team a while, but Smalls eventually becomes a member of the term. Smalls may never have an absolute advantage in catching, but his comparative advantage in catching gets a little better with time.
Thanks to Amanda Mandzik for the clip submission and summary.
In The Sandlot, neighborhood kids play an “endless dream game” all summer long. There are two kids on opposite ends of the spectrum when it comes to baseball talent and natural ability. Benny is the superstar on the local sandlot team. He has a clear absolute advantage over all the others in running, hitting, throwing, and catching. On the other hand, this scene demonstrates the skills of Scotty (nicknamed “Smalls”), who is new in town, He possesses book smarts but is clueless about baseball. He can’t throw or catch and has little knowledge about baseball in general.
He’s still a valuable member of the team because Benny can only play one position at a time. While he may have an absolute advantage in all positions over Smalls, there needs to be a division of labor in order to field a team.
Thanks to Amanda Mandzik for the clip submission and summary.
With summer break on the horizon, Ferris wants to skip school to enjoy a beautiful spring day near the end of the semester. In the opening scene, Ferris rhetorically asks how he could “possibly be expected to handle school on a day like this.” Nevertheless, there will be costs associated with his truancy. First, he admits:
This is my ninth sick day this semester. It’s getting pretty tough coming up with new illnesses. If I go for ten, I’m probably gonna have to barf up a lung, so I’d better make this one count.
Ferris Bueller’s Day Off, 1986
At this point in the school year, Ferris’ pattern of playing hooky has aroused suspicions that could land him in trouble. The opportunity cost of his day off from school is an ordinary day of classes free of the fear of getting caught and punished with repeating his senior year.
While Ferris manages a mostly relaxed day, by the end of the movie he undergoes a nerve-wracking sprint back to his house to beat his parents home and a nearly catastrophic confrontation with his principal. In spite of the unwanted stress associated with sneaking around, Ferris’ conclusion to his cost-benefit analysis for skipping school remains the same at the end of the movie: “Life moves pretty fast. If you don’t stop to look around, you could miss it.”
Thanks to Amanda Mandzik for the clip submission.
In Surfer, Dude, a soul-searching surfer (played by Matthew McConaughey) experiences an existential crisis when no waves come for over a month. When asked “what’s so special about surfing,” he responds with:
What’s so special about the wind? Surfing is to… be with that mystery. To ride
Surfer, Dude (2008)
that mystery for as long as you can. And then when it’s over that’s cool because
you know what? You were there, in line and on time.
Ocean waves can be forecasted, tracked, and even hunted by the most dedicated surfers, but ultimately, they are an unpredictable natural resource that is scarce. McConaughey’s character recognizes the value of this scarce resource beyond monetary terms.
Thank you to Amanda Mandzik for the clip submission.