In the 1940s, the US created the Center for Disease Control and investments large sums of money to eradicate malaria. The pesticides that were used, however, were responsible for almost eradicating the bald eagle, the US’s national bird.
The G Word with Adam Conover – Misaligned Medical Incentives
While doctors are likely to be focused only on saving lives, medical insurance companies may be focused on increasing the quantity of healthcare a person receives. In this brief scene, we consider whether it’s appropriate for insurance companies to charge without consent and whether doctors may be incentivized to do more than necessary to increase earnings.
The G Word with Adam Conover – Cost Benefit Analysis of Government Investment
The US economy has benefited tremendously from government investment in technological advancements designed to improve the US military’s firepower, but is it worth it? There are a number of equity considerations around the investments, but the efficiency gains are a bit more obvious. The research is funded by taxpayers, so it begs the question of what is the best use of funds. Adam questions how funds should be used, but essentially proposes viewers consider the tradeoffs that are present in each new advancement
The G Word with Adam Conover – Lemonade for Pictures
In order for bartering to be a successful payment of transactions, both sides must want what the other is offering and be willing to trade for it. Unfortunately, the seen above shows the difficulty of meeting the condition known as double coincidence of wants. Even though the man has Johnny Cash headshots, the young entrepreneur is only willing to accept US cash.
The G Word with Adam Conover — Obama Does His Own Taxes
Adam is contemplating whether it makes sense for him to star in a new series about the role of the government while it’s produced by former US President, Barack Obama. When Adam gets up, he notices the President doing his own taxes and is surprised he doesn’t just hire an accountant to do it. While Obama claims he enjoys it, he doesn’t appear to be very good at it. Typically, people can benefit from trading services and specializing in things they are good at relative to other people. The opportunity cost of the President doing his own taxes is likely really high compared to an accountant.
Spider-man (2002) — Making a Choice
In this clip, Green Goblin has given Spider-man a choice between saving his girlfriend or a car full of children. Even superheroes face opportunity costs! While it looks like there is a tradeoff between saving one versus the other, there are also larger opportunity costs associated with choosing to be a superhero. By becoming Spider-man, Peter Parker places his loved ones in danger when he could be living a “normal life,” but that also means the larger population loses their “friendly neighborhood Spider-Man.”
This clip was submitted by Lianne Kulik, who learned about it from Megan Kirts and Brian O’Roark.
Boston — Rock & Roll Band (1976)
This song is older but is still useful as a discussion about investing in human capital. Human capital is much more than just getting a degree. Human capital also involves general knowledge (what do you know?), skills (what can you do?), experience (where have you been?), and personal characteristics (are you reliable? do you work well with others?). If you have a small enough class, ask students to identify investment in these characteristics based on the story in the song. Not only does the song tell a good story, but it also shows that there’s more than one way to get an education.
Thanks to Bryan Sloss for the submission and summary!
TurboTax — Too Busy to do Taxes
The guitar player is too busy to do his taxes, but TurboTax is happy to step in. The opportunity cost of stopping to complete the task is high for the guitar player but low for the accountant. The two can benefit from trade by having the musician continue to produce music and the accountant complete the taxes.
Thanks to Luke Starkey for the clip and summary!
Braveheart — We Didn’t Get Dressed Up for Nothing
In this scene, the Scottish army is waiting to fight the English army. William Wallace (Mel Gibson) is going to “pick a fight” and make sure that the nobles from each army don’t negotiate a peace. His fellow leaders are in charge of passing out weapons. When asked what to do they remark, “we didn’t get dressed up for nothing.”
They are falling prey to the sunk cost fallacy. Just because they’re all dressed and ready to fight doesn’t mean that is the logical thing to do. The soldiers are not using effective marginal analysis to determine whether fighting is the next best course of action.
Thanks to Luke Starkey for the clip and summary!
Elf — Buddy’s Comparative Advantage
Buddy is a human living in an elf’s world. He finds there are a lot of things he’s not so good at compared to the other elves. Before getting too sad, the other elves point out a lot of things that Buddy is good at compared to them. Even if someone is good at everything, they can still benefit from trading their services with others. Trade is often based on each person’s comparative advantage. For Buddy, that’s changing the batteries in the smoke detector.
Thanks to Mandy Mandzik for the clip recommendation. Check out her working paper, All I Want for Christmas is an A on My Econ Final: A Holiday-Themed Review Class, for more Christmas-themed economics examples.