Tate has no problem sharing his salary, but it’s unclear the main driver of the salary. In reality, salaries are comprised of a variety of skill and compensating differentials as well as potential efficiency payments. Tate has a doctorate of pharmacy, which should result in higher pay for human capital investments. In the clip above he mentions that people could die if he messes up, which probably adds a lot of pressure to his workday. This pressure could be a compensating differential that increases his pay. However, there’s also a chance he’s paid highly so that he doesn’t goof off, which would be an efficiency payment.
Chris Rock describes taking his daughter to her high school orientation and hearing the vice principle talk about how students can be anything that they want to be. While optimistic, Rock points out that it’s more appropriate to tell them that they can be whatever they’re good at as long as someone is hiring. It turns out Chris Rock and stand up comedy has a lot of insights on economics.
Arthur bought a tombstone a while back in order to save money and the salesman assured him that he would most likely be dead by 2000, so he pre-printed the “19” on the tombstone so that they would only have to fill out the end of the year. Fast forward to 1999 and Arthur finds out he has 8 months to die or else his tombstone will go to waste. This clip is a succinct enough clip to teach about sunk costs since the price of the tombstone has already been paid and Arthur wouldn’t be able to get his money back.
A few years back there was a popular video of a human powered ferris wheel in India. I use that clip to talk about labor abundance in the Heckscher–Ohlin model of trade since India is so labor-abundant. Earlier we came across this fantastic video of a construction site in Thailand (another labor rich country). For small construction jobs, the workers will use manpower (literally) instead of machines to drive piles into the ground. This clip could also be used in a labor economics setting if you’re talking about substitutes in production. Either way, this is a fun-video for class with a pretty nice beat from the tambourine-wielding foreman.
The LA Clippers explain the difference between variable and dynamic ticket pricing, which are often confused by fans. Variable pricing refers to changes in ticket prices based on factors like opponent, day of the week, or time of the game. Dynamic ticket pricing takes things a step further and actually bases the ticket price off demand and supply for a particular game.
Dee offers her womb to become a surrogate for a couple. In order to try and get a higher payoff, she offers to have more children at a discount for the couple. She notes that savings really kicks in if the couple were to have multiple children at one time. She even offers to be an octo-mom. This could also serve as a fun example of second degree price discrimination.
Rick’s quote in this episode is as followed, “The point of automation is to reduce cost and labor!” He says this because his robot’s dialogue disappointed him. This directly relates to economics, labor economics in particular, as when a firm’s supply of labor becomes too inelastic they will substitute capital for labor in order to reduce costs and increase profits. The firm, or Rick, is substituting capital for labor as we saw when examining firms’ reactions to labor markets.
Thanks to Justin Cooper for the clip and description!
Eyeglasses in the United States can cost hundreds of dollars and that’s probably because 80% of glasses are manufactured by one firm under different brand names. Because they produce both luxury and basic brands, they are able to raise prices well beyond a more competitive price. Luxottica even owns many of the sunglasses stores, which gives them buying power over inputs.
When Mr. Pulitzer decides to raise prices in the distribution channel by forcing the newsies (the newspaper boys) to pay higher prices for a pack of 100 papers, the newsies decide to go on strike. Without raising the price to the final consumer, the price increase essentially just lowers the profits the newsies can collect. They decide to go on strike and create a newsies union to have more monopoly power in the process.