Tag: opportunity cost

The Good Place – The Trolley Problem (Part 2)

The veil of ignorance is a hypothetical situation created by philosopher John Rawls to help illustrate how self-interest and ego impacted decision-makers at the highest level. Rawls wanted to find a way to create a more just society by exposing individual biases that may create injustice. The veil of ignorance is a way to expose students to their own biases and illustrate how their personal experiences and self-interest may shape the way they view the world and others around them. Under the veil of ignorance decisions about justice and the allocation of resources are made by a person who does not know what position they may have in society.

The Trolley Problem is used to demonstrate the role the veil of ignorance plays in decision-making. Students are asked if they would save five people from a speeding car if they had to push one person in front of the car. They are then asked to remove the veil of ignorance and see how they would react if someone they loved were in the group of five people who would be hit, or if someone they loved would be pushed in front of the car to save the five other people. This unlikely scenario is meant to reinforce how self-interest and personal experience can impact the decision-making process.

Thanks to Jamie Wagner for the clip recommendation and summary!

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The Good Place – Trolley Problem

Chidi and Eleanor tackle a famous ethical dilemma, the trolley problem. The thought experiment is popular in philosophy and ethics courses, but the same experiment can be used in an economics context when discussing opportunity costs and costs. In a literal sense, whichever way the trolley goes will have a cost associated with it based on the people who will die. Depending on the structure of your course, you may also be able to look at the trolley problem from a game theory perspective.

Thanks to Jamie Wagner for the clip recommendation

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Adam Ruins Everything – “Free” websites

There are a variety of “free” services and products that we use every day, but are they really “free”? They’re pitched to us as having no cost, but the costs are much more than we may ever realize. There’s an older saying in the tech world that “if the product is free then you are the product.” Companies offer zero-price services to customers but earn a profit by selling data to other companies who would like to know more about you.

Just because a product or service is listed as $0 doesn’t mean there aren’t costs involved. There will always be an opportunity cost associated with the choice to use the service and that cost includes where your data and privacy end up.

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The G Word with Adam Conover – Obama is Still Doing His Taxes

In an earlier episode, we learn that President Obama enjoys doing his own taxes, but Adam points out he would be better off with an accountant. Specialization and trade allow people to see improved efficiency but doing everything yourself can result in a lot of wasted resources. At the end of the series, we see President Obama is still working on his taxes and has made a lot of mistakes already.

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The G Word with Adam Conover – Monetary Stimulus During Covid

Whenever a country enters a recession, there are two classes of responses available: fiscal and monetary policy responses. Fiscal policy responses focus on taxation and spending while monetary policy responses refer to Central Bank activity. In the United States, fiscal policy is administered by the Federal Reserve. The Fed is responsible for influencing the quantity of money and credit in the economy. During the Covid-19 pandemic, the Federal Reserve was responsible for issuing treasury bonds to finance fiscal policy decisions.

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The G Word with Adam Conover — Obama Does His Own Taxes

Adam is contemplating whether it makes sense for him to star in a new series about the role of the government while it’s produced by former US President, Barack Obama. When Adam gets up, he notices the President doing his own taxes and is surprised he doesn’t just hire an accountant to do it. While Obama claims he enjoys it, he doesn’t appear to be very good at it. Typically, people can benefit from trading services and specializing in things they are good at relative to other people. The opportunity cost of the President doing his own taxes is likely really high compared to an accountant.

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Spider-man (2002) — Making a Choice

In this clip, Green Goblin has given Spider-man a choice between saving his girlfriend or a car full of children. Even superheroes face opportunity costs! While it looks like there is a tradeoff between saving one versus the other, there are also larger opportunity costs associated with choosing to be a superhero. By becoming Spider-man, Peter Parker places his loved ones in danger when he could be living a “normal life,” but that also means the larger population loses their “friendly neighborhood Spider-Man.”

This clip was submitted by Lianne Kulik, who learned about it from Megan Kirts and Brian O’Roark.

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TurboTax — Too Busy to do Taxes

The guitar player is too busy to do his taxes, but TurboTax is happy to step in. The opportunity cost of stopping to complete the task is high for the guitar player but low for the accountant. The two can benefit from trade by having the musician continue to produce music and the accountant complete the taxes.

Thanks to Luke Starkey for the clip and summary!

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Christmas with the Kranks — Skipping Christmas

With their daughter heading out of town, the Krank family decides to skip Christmas and head on vacation. An opportunity cost is the value of the next best alternative. While their daughter was still at home, the Krank family preferred spending it with their family and celebrating Christmas. After their daughter announces she’ll leave, the Krank family decides to head to the Caribbean.

Thanks to Mandy Mandzik for the clip recommendation. Check out her working paper, All I Want for Christmas is an A on My Econ Final: A Holiday-Themed Review Class, for more Christmas-themed economics examples.

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Aladdin: One Jump

Aladdin has stolen a loaf of bread is furiously trying to escape Razoul and his guards. The potential cost of stealing the load of bread is large, but Aladdin notes that he only steals when he has to: “I steal only what I can’t afford.” In this sense, Aladdin is weighing the expected costs against the benefits from stealing the bread and reasons that it’s worth the risk when it means he gets to eat.

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