Sam is ready for her sleepover, but didn’t pack a toothbrush. She’s already realized that when her teeth fall out, she gets money from the Tooth Fairy. She’s connected the dots and realized that by not brushing she could get the income sooner. Her parents aren’t amused.
This scene was brought to my attention by a regular #TeachEcon contributor, Courtney Conrad.
Thanks to James Tierney for actually posting the video on Critical Commons.
Barney’s girlfriend finds his closet full of suits and gives him an ultimatum. He must choose between a closet of suits that he loves or a beautiful girl. He then breaks out into song about the benefits of both before ultimately making his final decisions.
Thanks for the recommendation Courtney Conrad!
Ariel is making a deal with Ursula to become human. The clip begins with Ursula telling Ariel that she can become a human for three days by taking her magic potion. If Prince Eric falls in love with Ariel by the third day then she can stay human forever. If he does not fall in love with her, then she will go back to being a mermaid and work for Ursula. In addition, Ursula wants Ariel to give up her voice as payment for the potion to turn human.
This clip applies to the economic concepts of opportunity cost and decision-making. Life is full of choices and with each choice comes evaluating your opportunity costs. One’s opportunity cost is what they give up to obtain something else. In this clip, Ariel has to decide whether to give up her voice to become human. At one point in the clip, Ariel says that if she becomes a human forever then she will never see her family again. She has to consider if she wants to give up being with her family to be with Prince Eric. She also must decide if she wants to give up her voice in order to turn human for three days. This clip is a great example of opportunity cost and how one must evaluate their opportunity cost to make the best decision for them.
Thank you for the clip and summary Meredith Feinstein!
In The Pursuit of Happyness, Chris (played by Will Smith) is cold calling potential clients in order to increase sales for his company. The salesman who creates the most new clients will be hired on, but because of his personal life he isn’t able to put in the same amount of time as his competitors. Chris discusses a variety of ways he saves time, including not hanging up the phone and not drinking water, each of which would cost him valuable time.
In Pretty Woman, Edward is really interested Vivian and makes a business proposition for her to spend a week with him. He offers to hire her as his companion. During the negotiation process, they attempt to settle on a price. They agree on a price of $3000, but at the end of the clip she admits to Edward that she would have stayed for $2000 (implying she has now earned $1000 of producer surplus), but Edward reveals he would have actually paid her $4000 (implying his consumer surplus is also $1000).
The local shop owner is having a big summer blowout sale and prices are low! The problem is that in this magical world, summer items aren’t exactly in high demand.
Thanks to Christine Cai for the clip!
One of the most common fallacies that people fall victim to is the post hoc ergo propter hoc fallacy. Simply put, don’t simply assume that because one thing follows another, the first thing caused the second thing to happen.
If you’re teaching the sunk cost fallacy, this clip from Better Call Saul can be used to define the term. Kim tries to convince Jimmy to keep being a lawyer because of how much time and effort he put into the bar exam. Jimmy cuts her off to teach her about the sunk cost fallacy and how it’s a waste of time.
Michael Coon shared this great clip from State Farm. If you saved $480 on car insurance, what would you buy with the money instead?
This clip is a great one for the first week of a principles course and can be used to teach a variety of concepts including opportunity costs, marginal analysis, and incentives. Farva isn’t the smartest police officer on the force, and he’s an even worse economist. The gas station offers a “free” hot dog for people who pump 10 gallons of gas, but Farva only needs 9 gallons to fill his car. He has to make a decision on the margin about whether he wants to get that extra gallon. He weighs the costs and benefits of the extra gallon to determine if the “free” hot dog is worth the cost of 1 gallon of gas. Ultimately, the hot dog cost his 1 gallon of gas.