Teaching Economics with Media
When the local garbage companies go on strike, Frank comes up with a plan to have Charlie, Mac, and Dennis go around and pick up trash. Initially they are slated to get a van and go door-to-door, but they realize it may look better if they drive around in a limo to pick up the trash. What they don’t realize is that customers don’t really care because they just want the trash gone and are willing to pay high prices for it to be removed.
The gang decides to try and start selling their own gasoline because they are tired of the high prices the local gas station is charging. The three come into the gas station to let the owner know that he’s about to see the pain of a free market because they intend to take customers away from him. Free markets allow for easy entry and exit of competitors, which should drive down prices and profits.
Dennis and Dee are trying to buy a crack rock in order to manipulate the welfare system, but they aren’t really sure of the cost of a crack rock. When they approach a street dealer, he quickly realizes that the two clients aren’t well informed and he can earn a bit of extra profit by charging them a higher price. Luckily for him, they agree.
Sinbad travels to a popular city with goods from a country which is not only highly secluded, but up until this point has refused to trade with other nations. Sinbad, being the only one able to establish trade with them, sets up a shop in this popular city, knowing that his goods will sell quickly. Within the hour of setting up shop, a merchant comes by and buys out his entire stock and sells them for a higher price. Realizing his mistake of setting a low early price, and eager to try to learn more about the economy, Sinbad finds the merchant again in a bar and asks for his help. This clip shows the interaction between the two, as the merchant teaches Sinbad about how his mistake heavily put him behind, and how to avoid such a mistake in the future.
Since Sinbad was the only one who is able to get sell these products from the highly secluded country, he was a monopoly firm in the area. He was bested when the other firm arbitraged his product.
Clip and summary provided by Michele Killoran.
Robin Williams stars as a defected Soviet living in the United States in Moscow on the Hudson. His shift from communist markets to American-style markets is a bit overwhelming as he visits a grocery store to find the coffee aisle. After realizing that there’s no line to buy coffee and that there are a dozen varieties of coffee, he passes out in the middle of the store.
When a firm has monopoly power, they have the ability to charge higher prices for a reduce quantity (and sometimes quality) service. If consumers don’t have alternatives then they are forced to deal with poor customer service and unreliability. This comedy piece highlights a fictions cable company that actually admits they aren’t very good.
The group originally agreed to have sole control over Miami and New York and share Los Angeles among the two separate gangs, but it appears that independent members have been poaching areas from one another. The strength of a cartel is in their ability to self-regulate and to not over produce. Cartels have the ability to operate like a monopoly, but only if they’re stable.
In this clip you see a bar that’s on the South Side of Chicago. The bar is usually dead but very recently “hipsters” discovered the bar. They thought that the snide Russian bartender and expensive drinks made the place different and appealing to them. This bar serves cheap low end alcohol and in the video you can see price discrimination happening. The prices start to change and become higher when the bar serves the hipsters because they are able to pay those high prices versus the people from south side that can’t. The hipsters are also not realizing they are being scammed when the low end vodka is put in a more expensive brand’s bottle.
Thanks for the clip and summary Fiona Brandman!
Adam Ruins Everything is a half-hour informational comedy were host, Adam Conover, debunks popular myths. Each episode is divided into 3 segments with some common theme. In the Spring of 2018, James Tierney and I sat down to go through all three seasons of Adam Ruins Everything to pick out examples in each episode that could be used in an economics course. If you’re curious about the paper, you can read about it here.
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.
Alan needs some extra income and decides to offer massages at the mall. He quickly finds stiff competition and gets into a price war with another masseuse. The price war eventually gets so low that the entrant decides to exit the market.