Teaching Economics with Media
This Wendy’s commercial picks fun at Soviet economics that were notorious for limiting options available to consumers in the name of efficiency, but monopolistic competition in a capital market thrives on product differentiation and the ability to cater to people’s preferences.
Thanks to Rob Szarka for the find!
This young Thai kid dreams of being an astronaut and making great scientific discoveries, but he’s got to save enough Baht (Thai currency) to be able to afford to the telescope. For reference, 2500 baht is about $75 US. The young boy is tempted by ice cream, street food, video games and toys, but he maintains his frugalness and saves up enough to buy the telescope. After enough time, he rushes to the store to buy the telescope, only to find out that the telescope now costs 3500 baht. The message is clear, inflation occurs and makes the value of money deteriorate over time. This Thai bank is encouraging savings to help combat that.
Thanks to Peach Tantihkarnchana for the clip suggestion!
To celebrate the 50th anniversary of the Big Mac, McDonalds is releasing a special coin that allows the holder to purchase a Big Mac in any country around this world. This “food-backed currency” allows the holder to avoid exchange rates between countries and references The Economist’s Big Mac Index as Big Mac’s ability to be essentially identical across the world. Economists may soon be able to teach a whole survey course using tv and movie scenes referencing McDonalds (1, 2, 3).
Thanks to Kim Holder for the clip suggestion:
Cut your cell phone expenses in half and all of a sudden you feel a bit richer, but does that mean you think you should be driving a significantly more expensive car? When incomes increase, we tend to purchase more items, but luxury goods require a pretty substantial increase.
People will go to great lengths to get “free” wifi even though they may not realize the cost associated with the decision. In this commercial for Qwest Communication, they try to offer wifi where people actually want to go.
In this commercial for the new caramel M&M’s, our grocery store employee is trying to buy back M&Ms from customers as they’re leaving the store. The employee offers $2, $3, and his watch to get the M&Ms back even though the customers could easily go through the line again and get a new bag. People tend to value items they possess at a higher rate than they actually paid for them and this action appears irrational since the transaction costs of buying another pack is already low.
Thanks to James Tierney for actually watching the commercials on Hulu:
Normally a swear jar would be used to curb bad behavior (like in this clip from New Girl), but the folks around this office are using the money to buy Bud Light and have incidentally increased the usage of swear words.
Sometimes a good thing is too good to pass up. The young men could continue the big race or they could sacrifice their chance for a cold beer. They chose the latter.
Rock, paper, scissors is a good game to help settle a dispute, but this simultaneous move game has no clear advantage. It helps if you have an actual rock in your back pocket though.
When one party has more information about themselves than the other party, economists describe this situation as asymmetric information. We know a lot about our “true” selves, but we can use signals to send to other parties to either conceal our true selves or hide a characteristic we don’t want to reveal. In this clever Budweiser ad, the hitchhiker is trying to conceal his real intentions by carrying a case of Bud Light.