Christmas with the Kranks — Christmas Tree Demand

The Kranks are (initially) planning to skip Christmas this year, which means their demand for Christmas trees decreases. When their daughter announces that she’ll be back home for Christmas, the Kranks scramble to try and find a tree. Unfortunately for Luther, there aren’t many trees available because it’s so close to the holidays and he ends up paying full price (instead of a discounted price) for a pathetic tree. When decision-makers don’t have much time to make a purchase (like Luther right before Christmas), their demand is fairly inelastic.

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.

Christmas with the Kranks — Skipping Christmas

With their daughter heading out of town, the Krank family decides to skip Christmas and head on vacation. An opportunity cost is the value of the next best alternative. While their daughter was still at home, the Krank family preferred spending it with their family and celebrating Christmas. After their daughter announces she’ll leave, the Krank family decides to head to the Caribbean.

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.

Aladdin: A Ring Exchange

In this scene, the King is desperate to find a suitable prince for his daughter, but Jafar offers to help. The cost? The king’s expensive ring. Despite a clear emotional attachment to the ring, the king offers to exchange the ring for Jafar’s services since he believes the Jasmine’s benefit will be worth the loss.

Aladdin: One Jump

Aladdin has stolen a loaf of bread is furiously trying to escape Razoul and his guards. The potential cost of stealing the load of bread is large, but Aladdin notes that he only steals when he has to: “I steal only what I can’t afford.” In this sense, Aladdin is weighing the expected costs against the benefits from stealing the bread and reasons that it’s worth the risk when it means he gets to eat.

Moana: Where You Are

Moana is ready to leave the island, but Chief Tui wants to convince Moana that the village of Motunui is all she needs. The island’s resources are scarce: there are only so many people and so much land. The islanders rely on each other to produce products using the resources that are available.

A second consideration for this video is how it relates to command and control economies or economies that practice arbitrage. There may be other island economies nearby that Motunia could trade with, but they currently only consume everything they produce on their own.

Community — Chicken Finger Trade

Abed is running the fryer in the cafeteria and is in charge of the most popular item on the menu: chicken fingers. The school’s Spanish teacher wants those tenders and trades Abed for a box of tenders. The exchange? A 10% bump in his study group’s grades. Exchanges can be achieved through a barter system when someone has something that the other one values. This double coincidence of wants is required for a successful exchange.

Community — Chicken Finger Shortage

Chicken fingers at the school cafeteria are a hot commodity! People are racing to the cafeteria to get them and demand is high, but they often run out before everyone can be served. If prices were higher then fewer people would want chicken fingers and there may be enough for everyone to get some, but instead, a shortage ensues. The original fry cook skims some of the tenders to give to select people, an example of inefficient allocation.

A group of close friends decides to take over the operation (like in a mafia movie) so that they can determine the allocation of this scarce resource. This group begins skimming the fingers as well and reselling them to others in the school at higher prices so that they can profit from the shortage.

Thanks to Sarah Corrigan for the clip recommendation!

Super Troopers — Sunk Costs [NSFW]

Some young drug enthusiasts are driving while under the influence and consider a fairly interesting application of public goods and private ownership. Eventually, they hear the familiar sound of a police car behind them and scramble to hide the evidence of their crimes. The guy in the backseat eats a lot of drugs in an effort to hide their illegal goods. The guy in the front seat points out that he ate $130 worth of drugs and then lets him know that he can pay him whenever. This same attitude isn’t taken when the drugs are thrown out of the window, which would have been the alternative. Just because the guy in the front seat had paid $130 for the drugs doesn’t mean that’s justification for getting reimbursed. A sunk cost is a cost that is unrecoverable and shouldn’t be considered when making decisions.

I Can See Your Voice — Asymmetric Information

Could you tell if someone is a good singer just by the way they look or by how they lip-sync a song? In this music game show, contestants perform a variety of tasks and judges have to decide whether or not the person is actually a good singer. The show’s host and the performers know the truth, but the judges are left in the dark. This show, and even just the concept of the show, is a great example of asymmetric information. For judges, it’s hard to make decisions with limited information, but they’ll use signals to see if they can be successful.

Full episodes of I Can See Your Voice can be found on Fox: https://www.fox.com/i-can-see-your-voice/

Thanks to Shreyasee Das for the recommendation!

Castlevania — The Importance of a Ship Captain

Issac and his friends are in search of a ship and finds a captain who isn’t current sailing. Issac threatens to kill the Captain and take the boat, but the Captain reminds him of how important it is to have the captain on the boat since he knows how to actual sail the boat. Isaac thinks that sailing a boat can’t be that hard, but the Captain points out that sailors exist for a reason. He is willing to sail Isaac and his friends as long as he is paid and promised not the be murdered. This scene is a good example of the double coincidence of wants and the importance of specialization and trade. The Captain has years of experience sailing ships while Isaac does not. It’s worth it to Isaac to trade coins for the Captain’s skills.

Thanks to Bryan Sloss for the clip recommendation

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