Teaching Economics with Media
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!
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!
“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!
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!
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.
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!
Russ Roberts spins a tale of a local bread market and wonders about the power of such a market. He hypothesizes the trouble that could occur if one person were given supreme power and became a bread czar. You can read the poem online as well, with commentary!
Lil’ Dicky shows the process of trying to make the most epic rap video of all time, but without spending much money. The entire song looks at a variety of ways that Lil’ Dicky tries to save money and avoids spending money on unnecessary expenditures “just to flex.”
Joe is trying to find his parents and comes across a Native American selling some fireworks. He naively asks if he can help him track his parents, but Kicking Wing tells him that tracking is a way of the past and he is focused on selling fireworks to help him go to veterinarian school. Amazed, Joe Dirt asks where all the good fireworks are, but Kicking Wing only sells snakes and sparklers because those are the fireworks he sells. Joe explains that Kicking Wing needs to focus on selling fireworks that consumers like if he wants to be successful.
Thanks to James Gordon from Elbert County Comprehensive High School for the clip suggestion and description!
The squad is invited over to the Captain’s house for a birthday party, and they all have the same idea when it comes to wine. While Jake wants to try to impress the captain with the finest bottle of wine, he’s a little out of the price range and settles for an $8 bottle of wine. Come to find out, the entire squad buys the same bottle of “wine drink” and Kevin isn’t too fond of their selection.
While it isn’t clear that there is much of a difference between cheap and expensive wine, “wine drink” probably doesn’t send the best signal of quality.