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.
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.
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!
Issac and his friends are in search of a ship and finds a captain who isn’t current sailing. Issac threatens to kill the Captain and take the boat, but the Captain reminds him of how important it is to have the captain on the boat since he knows how to actual sail the boat. Isaac thinks that sailing a boat can’t be that hard, but the Captain points out that sailors exist for a reason. He is willing to sail Isaac and his friends as long as he is paid and promised not the be murdered. This scene is a good example of the double coincidence of wants and the importance of specialization and trade. The Captain has years of experience sailing ships while Isaac does not. It’s worth it to Isaac to trade coins for the Captain’s skills.
Thanks to Bryan Sloss for the clip recommendation
Appa has made a collection of baked goods but his wife thinks she could do it better. In an earlier scene, Umma damages a friend’s car and made offered to pay for half the cost of repairing the damage. Her husband is disappointed because he feels he could have saved them a lot of money. Umma lets him know that’s why she isn’t a millionaire, but at least she’s a better baker.
Thanks to John Kruggel for the clip submission.
Captain Holt, the dry, stoic, strictly professional captain of the Brooklyn 99 precinct, is searching for a new assistant. He is exhausted by the search process and finds all applicants unsuitable for reasons such as using improper grammar in an interview, and including Microsoft Word use in the “special skills” section of a resume. Exhausted by the search, he gives up and is willing to forgo an assistant just to not have to deal with the search process. His subordinate, Detective Jake Peralta, persuades Captain Holt that Peralta can find an assistant for him, and Captain Holt agrees on the terms that he can fire whomever Peralta hires.
This episode is an example of employer frictions resulting from search costs. Both Holt and Peralta have to devote man-hours to the search, and for the particularly selective Captain Holt, the search costs are high enough that Holt is willing to do the work of an assistant himself without extra pay. The opportunity cost of Peralta searching for assistant is less than the opportunity cost of Holt searching, likely both because Holt faces high psychic costs of the search and because, as a detective, Peralta’s time is worth less to the precinct than the captain’s time. Holt’s decision to allow Peralta to search for an assistant suggests that the opportunity cost of Peralta’s lost man-hours do not outweigh the expected gain of Holt having an administrative assistant, which would allow Holt to be more productive in his position in the future and results in a net gain for the overall productivity of the precinct.
Submission and description submitted by Melissa Paton
The Easter Bunny Is Comin’ to Town (1977) is a classic kids’ claymation film. In this clip, Sunny talks about how trade is necessary for Kidtown!
Thanks to James Tierney for the clip and description!
Mitch Hedberg has spent a lot of time becoming a good comedian, but as soon as he gets to Hollywood, people start asking him to do other things that he isn’t (comparatively) good at like acting or writing. He compares this to spending time becoming a great cook and then being asked if you could farm. People should specialize in what they have a comparative advantage in and if Mitch Hedberg spent is time writing or acting then he’d be giving up a lot of income as a good comedian.
You can see the full clip on Comedy Central.
James Tierney shared this great clip on his website a few years ago and it covers the idea of using Project Runway to discuss specialization and gains from trade. One of the contestants describes the process of designing the outfit line and discusses each member’s role in the creation of the outcome.
This is one of the better “lyrics” music videos made by a YouTube user for Brad Paisley’s American Saturday Night. I use this song as my pre-class music for the international trade chapter. I use this as an introduction to start talking about why we have preferences for items from certain regions of the world and why we don’t just make them all here?