Frozen: Let It Go

Frozen is the story of two princesses, Anna and Elsa. Elsa has magical powers that she is forced to hide her entire life until her coronation ceremony. Elsa flees to the cold, remote mountains and sings “Let it Go” after finally accepting her magical powers and letting go of the pressure to hold back her true self. When she sings “the past is in the past”, it’s a reminder of the role of sunk costs in the decision-making process. Sunk costs should be ignored because that time/energy/money cannot be recovered in the present.

Thanks to Matt Rousu for the clip.

Kitchen Nightmares – Marginal Touches

Chef Ramsey stops at a Scottish restaurant to help a struggling chef. What he finds is a restaurant where each employee makes a marginal change to the dish before it is sent on its way. A single dish may be modified by 7 different people, but it isn’t clear exactly how much of a contribution each is making. While each may add some benefit with their labor, the additional cost of waiting to send the dish out (and the cost of such a large staff) is part of the reason Chef Ramsey is there to help. The labor costs of the restaurant are $4,500 each week, but they aren’t even breaking even.

Thanks to Alex Marsella for the clip suggestion!

Pat Dixon — The 5th Beer is the Best Beer

Pat Dixon describes how he loves the fifth beer because it makes him look good, which are good qualities for a day drinker. This clip can be used to teach about diminishing marginal utility and increasing marginal cost. For Dixon, the 5th beer is the optimal beer.

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