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!

T-Mobile — Ariana or Maps?

The driver of the car faces scarcity (limited data). The driver is forced into a decision between streaming music and using maps with her data. At the end of the commercial she chooses maps, leaving Arianna as her opportunity cost.

Thanks to Brian Devitt for the clip and description!

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.

Goldfish Pinball Commercial

The dark orange goldfish excitedly explains to his light orange friend that he has invented a new board game. He goes over the extremely complex rules to the game and this conversation ensues:

Dark orange fish: Let’s play!
Light orange fish: What do I have to lose?
Dark orange fish: Just the next three days!

This would be a great intro clip to show for opportunity cost / implicit costs. Learning all of the very intricate rules and playing this game will be extremely costly for the light orange fish in terms of the time he has to give up to participate. What else could he do with his time instead?

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

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!

Popeyes — Quantity vs Quality

Popeye’s argues that economics can’t explain why their chicken tastes so good. The professor looks at the inverse relationship between quality and quantity, so maybe this is actually a marketing class?

Wendy’s — Choice is Good

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!

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