Tag: economic rent

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.

0

Just Go With It: Negotiation Scene

Maggie (Bailee Madison) negotiates a deal with Danny (Adam Sandler) when he asks her to act like his daughter. This scene does a great job opening a discussion for consumer/producer surplus in a principles class (or economic rent in a labor class).

0

Catch Me If You Can: Supply Curve

Here’s a clip from Catch Me If You Can illustrating a few great supply curve principles, including reservation wage. This is the full scene, but you can clip it at 1:19 to show just the relevant parts.

0

Up ↑