Vice News – The NYC Taxi Medallion Crash

For decades, owning a New York City taxi medallion seemed like a safe investment. Because the city limited the number of medallions available, their scarcity generated substantial value, with prices eventually reaching more than $1 million. But the arrival of Uber, Lyft, and other ride-sharing services dramatically changed the market, and medallion values collapsed. VICE News talks with medallion owners about the financial consequences of seeing an asset they had counted on for retirement lose most of its value.

This clip provides a powerful real-world example of quantity controls and quota rent. By restricting the number of taxis allowed to operate, the medallion system created scarcity, with the value of that scarcity becoming capitalized into the price of a medallion. The arrival of ride-sharing services effectively increased the supply of alternatives and reduced demand for traditional taxis, demonstrating that quota rents (which represent the market value of a license or permit) can change dramatically when underlying market conditions shift.

2026 0

Zootopia — Barriers to Entry

In this particular scene from Zootopia, Nick Wilde and Finnick buy a large popsicle to eventually meltdown and reform into small “Pawpsicles” to sell to other animals. This scene can be used when teaching barriers to entry since the popsicle market appears to have very few barriers. The two of them are able to access all the necessary ingredients and can setup their businesses outside the bank easily.

Thanks to Bryn Goldman for the clip suggestion!

2020 0

Young Sheldon — Candy Entrepreneur

George has become quite the entrepreneur through arbitrage. First, he buys snow globes from a company going out of business to resell at a higher price than to his neighbors. Now, he realizes that he can buy candy in bulk and then sell it outside the vending machine to people looking for a cheaper option. Even though it’s against school rules, he realizes that the school’s monopoly power over the vending machines results in higher prices than what’s necessary.

2019 0

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.

2018 0

John Stossel — The Fight Against Food Trucks

John Stossel, through ReasonTV, looks at the regulations behind the food truck industry. From a competitive market standpoint, food trucks have the ability to respond to high demand areas by relocating at any given moment. For brick-and-mortar businesses, however, food trucks enter the market as a low-cost competitor and steal customers from permanent restaurants. Many cities in the United States have setup regulation limiting the location of food trucks or the hours they may operate. This rent seeking behavior, however, limits the amount of options available to consumers in the name of “fairness.”

2018 0