The crew of Apollo 13 is stuck in orbit around the moon and the NASA crew on the ground is trying to figure out how to get the astronauts home alive. Faced with only the tools in space and a limited time window, the engineers must use every available item at their disposal to maximize the amount of time before reentry to Earth’s atmosphere. This clip is a nice introduction to the idea of consumer choice, budget constraints, and utility maximization. All resources must be used in the model and there is no value to saving anything. The goal is to earn as much utility as possible given the budget constraint. The same issue faced the NASA engineers: they had to use all available resources, there was no benefit to saving items for next time, and they had to maximize the time/oxygen/energy for the astronauts.
Glenn wanted to see Saw because he thought it was about carpentry, but he quickly realized it was a horror movie. He wasn’t having a good time and even threw up in his lap, but his wife didn’t want to leave because they paid for the ticket and it was date night. Glenn and his wife should have left if they weren’t enjoying their movie since the tickets were non-refundable, but like many people, Glenn and his wife fell for the sunk cost fallacy.
Jeremy and John are seasoned wedding crashers and they are out looking for weddings to get easy dates, open bars, and nice meals. This example of free-riding works well because none of them pay the cost of attendance and they even come up with creative tricks to not have to pay for the cash bars.
Pat Dixon describes how he loves the fifth beer because it makes him look good, which are good qualities for a day drinker. This clip can be used to teach about diminishing marginal utility and increasing marginal cost. For Dixon, the 5th beer is the optimal beer.
Molly (Madeline Carroll) and her dad Bud (Kevin Costner) are driving down the road, but Bud is unhappy with egg salad sandwich as a lunch option. Molly quickly points out that they are on a budget and that if he wants to eat better then he needs to drink less beer. This tradeoff can be illustrated with a budget constraint in economics. Given a fixed level of income, the only way to get more (or better) food, is to give up something else.