Category: Cost & Production

The Founder — Opening Scene

The Founder is based on the rise of Ray Kroc and the McDonald’s brothers. The opening scene of the movie can be used to talk about a variety of topics in producer theory. Michael Keaton plays entrepreneur Ray Kroc and the opening scene starts with Kroc explaining how fast food establishments can upgrade to a 5-spindle milkshake machine and boost the production of milkshakes at the restaurant. Keaton also goes describes themes that are used in monopolistic competition that focus on firms differentiating their products, perhaps by being able to focus on milkshakes.

Thanks for the submission Ryan Herzog!

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I Love Lucy — 5 Cent Hamburgers

 

Price wars aren’t good for business profits, which is why many firms may want to collude. If two goods are close substitutes, prices should be driven down near the marginal cost of production. This is a good introduction to the long run outcome of perfect competition, but can also be used to show the shut down rule. When prices drop too low, it may be worth some firms to stop production.

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Human Powered Ferris Wheel

I use this in my international trade chapter to talk about factor endowments. Countries with a a lot of people (like India and China) will tend to do things using more labor than others.

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