Zelle — Birthday Gifts

From an economic perspective, giving the wrong gift makes society poorer. If you spend money on chocolates and give it to someone who happens to think it is worth less (due to an allergy!), you’ve lost value. Whenever you receive an outfit that is the wrong size or style, a candy you won’t eat, or something that is worth less to you than what the gift giver spent on it, an economic inefficiency has occurred. Thus, from an economic perspective, the most efficient gift is always cash. The person will maximize their own utility by spending (or saving) the money according to their preferences.

Submission and description from Erin Yetter!

Le Trèfle Paper — Emma

The digital revolution can replace a lot of items that traditional paper was used for, liking color pages, sticky notes, books, or puzzles, but it can’t replace toilet paper. Substitute goods are at the discretion of the consumers with some items being “perfect substitutes” and others being some gradient of substitutes. Digital toilet paper isn’t a very good substitute for the real stuff.

Thanks to Dr. Michele Pickett for the clip!

Could Have Had a V8

One of the classic commercials of the 1970s came from V8 (they have updated ones as well!). Unknowing consumers of snacks and sodas realize mid bite/drink that they could have had a V8 instead of their other choice. The concept of opportunity costs is that by consuming an item, you give up the opportunity to consumer something else. A rational individual will pick the item with the highest level of utility, but sometimes we aren’t fully aware of all the alternatives. The individuals in this commercial only realize when it’s too late.

The clip was described in Joel Waldfogel’s book, Scroogenomics: Why you shouldn’t buy presents for the holidays. Dr. Waldfogel also appears in an Adam Ruin’s Everything episode on the inefficiencies of gift giving.

Stella Artois — Change Up The Usual

This Stella Artois commercial features Sarah Jessica Parker reprising her “Sex and the City” role and Jeff Bridges in his from “The Big Lebowski.” Both of their characters had their respective go-to drinks. The cosmopolitan for Parker’s Carrie Bradshaw and a white Russian for Bridges The Dude. We first see Parker choosing to order a Stella Artois, which means she gives up her next best alternative the cosmo. This is a surprising choice, so much so that the entire restaurant comes to a halt. We then see Bridges enter, and the bartender assumes he is going to have his usual white Russian, but instead he also orders a Stella Artois (comically mispronouncing it as well!). Show this clip and have the students identify what the opportunity costs of choosing the Stella Artois is for each character.

Thanks to Erin Yetter (Twitter) for the clip and description!

Adam Ruins Everything — Diamond Rings

One of the textbook examples of monopoly power comes from De Beers Diamond Corporation and their control over the diamond markets since the end of the Great Depression. In this short scene, Adam Conover covers the history on engagement rings and discusses the monopoly power that the De Beers company had in the market.

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.

Adam Ruins Everything — Overfishing

 

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.

Adam covers the topic of overfishing and how it forces restaurants to market less popular fish as select or premium brands. Adam’s dad (an actual marine biologist) joins the scene to discuss overfishing.

 

Straight Talk — Income Effect

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.

Qwest Communications — Free Wifi

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.

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