Jaws – It’s an Eating Machine.

Who wants to swim at a beach with multiple recent shark attacks? In Jaws (1975), Mayor Vaughn knows that if word of the attacks gets out and the beaches shut down, it will cripple the local tourist economy of Amity Island. Tourists will choose other safer places to stay, and businesses will not want to invest in the area if it has become an undesirable vacation spot. If there is a shark terrorizing the local beaches, there is likely to be a decline in consumer and business confidence in the town causing the aggregate demand curve to decline.

Thanks to Amanda Mandzik for the clip submission & summary.

Air – Creating the Air Jordan

Air tells the story of Nike’s partnership with Michael Jordan and the creation of the Air Jordan brand. Nike beat their competitors in the race to sign Jordan to an endorsement deal by agreeing to a partnership rather than a standard endorsement deal.

In this scene, Matt Damon (Sonny Vaccaro) explains the idea of creating a brand around a player to Mather Maher (Nike Shoe designer Peter Moore). This business model was revolutionary and has been imitated by numerous companies.

Thanks to John Kruggel for the clip and summary!

Air – The Deal

Air tells the story of Nike’s partnership with Michael Jordan and the creation of the Air Jordan brand. Nike beat their competitors in the race to sign Jordan to an endorsement deal by agreeing to a partnership rather than a standard endorsement deal.

In this clip, Matt Damon (Sonny Vaccaro) negotiates with Viola Davis (Deloris Jordan) over Michael Jordan’s contract. Vaccaro explains that players don’t get to keep a cut of the sales, but Jordan’s mother emphasizes that the Jordan brand will utilize her son’s name, image, and likeness and he deserves to profit from that use.

Thanks to John Kruggel for the clip and summary!

60 Minutes — Changing Preferences

One of the common shifters of demand is changing tastes/preferences, but that is often taught as something beyond the control of firms. It’s often associated with fads or maybe new research, but firms can also adjust the tastes of their products to induce new preferences. This 60 Minutes segment looks at how companies are changing demand for their products by directly changing the product, or at least the perception of their product.

Thanks to John Kruggle for the submission!

Futurama — A Can of Old Fish

The gang heads to get some pizza and Fry wants his friends to experience anchovies, a type of small, salted fish. It turns out that these small fish were overfished and the population collapsed. Zoidberg even mentions how sorry he was that his people kept consuming them because they didn’t realize they were a common resource, subject to the tragedy of the commons.

Fry is incredibly rich, and wishes he could bring them back. He at first notes that even incredibly wealthy people aren’t able to purchase everything. At an auction, he finds that there is exactly one can left in the known universe and decides to bid all of his money for the “can of old fish”

While we normally wouldn’t pass judgement on someone’s preferences, it’s hard not to believe that this could a good example of a winner’s curse. Fry’s willingness to pay for the can of fish may not be $50 million, but the utility from winning the auction could be worth that.

Thanks to Jessica Pritchard for the clip suggestion!

West Side Story — America

“America” compares life in America versus life in Puerto Rico. While the men favor the lifestyle of their homeland, the women prefer the mainland. This is a fun introduction to a discussion on mobility and migration in a labor economics or even to discuss standards of living and preferences in a macroeconomics course.

Assessment idea: Have students list things things they would miss if they were asked to move to another country.

Looking for more: Do you want to see more economics in Broadway shows? Check out BroadwayEconomics.com

Thanks to Mark Sammons from the University of Arizona for sending this clip in!

Saturday Night Live — Chance The Rapper’s 2nd Favorite Things

Chance the Rapper is grew up in Chicago, which is nicknamed “The Second City.” In honor of his hometown, Chance the Rapper (along with Kyle Mooney) shares some of his other favorite second-best items, which he considers better than the first. This is a fun introduction to substitutes, or even monopolistic competition and product differentiation. This could be used in an upper-level class to discuss ordinal preferences or transitivity.

Thanks to Kim Holder and Darshak Patel for tweeting this video!

Life in Pieces — Discounts & Sunk Costs

 

Tim tries to host a guys night and things don’t seem to be going his way. Beyond the awkwardness of just the two of them, the big pay per view fight lasts only a couple of seconds. While the two did get to watch the fight, which had a knockout, it wasn’t quite worth the hundred dollars they paid. Tim notes that he may be able to turn it off and get his money back. With a lot of experience goods, it’s not necessarily the actual outcome of the action that people care about. Tim and Matt did see a fight, so why is he so focused on getting his money back?

A second quick econ line occurs later when they sit down for dinner. Even though Tim isn’t eating any tacos, he notes that the cook is cheaper since he expects Matt to eat 25 or 26 tacos. This form of bulk discounting represents second degree price discrimination. With this pricing mechanism, the hope is to induce customers to purchase more than they would have (law of demand) even though making an additional taco doesn’t have the added cost of another cook.

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!

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