Hot Ones — Gordon Ramsey

On Hot Ones, celebrity guests are interviewed while eating progressively spicier wings. In Season 8, Episode 1, Gordon Ramsey discusses the makings of a $25 hamburger as well as the costs that are often “hidden” from the customer. This is a fun, and relevant way, to introduce concepts like labor and rent to students who are unfamiliar with the costs of running a business. Toward the end, Ramsey discusses the notion of excess capacity, whereby firms are not necessarily producing at minimum average total cost. If firms can fill the excess capacity (perhaps through price discrimination), they may become efficient.

A big thank you to my student, Abdullah Al Otaibi, for sending me this clip!

2019 0

Speed Camera Lottery

How can we convince people to drive a safer speed? Kevin Richardson proposed setting up a speed camera (which are common across Europe) and take some of the money that is spent on ticketing speeders to redistribute to drivers who were driving the correct speed. Instead of using the potential fine as an incentive to discourage bad behavior, it cane be re-framed as an opportunity to be rewarded for good behavior.

2018 0

MedicoreFilms — Free Hugs

My students favorite clip when discussing product differentiation is this clip from MedicoreFilms where a guy offers Deluxe Hugs for $2 more. One of his opening lines best illustrates the concept of monopolistic competition:

Deluxe guy: How’s businesses?

Free guy: Mine are free, this isn’t a business.

Deluxe guy: Different people want different stuff, so it’s cool.

Businesses can differentiate their products by quality, style, location, etc. The guy offering deluxe hugs is trying to fill a portion of the market from people willing to pay more for “better” hugs.

2018 0

YouTube — Trying to Buy People’s Dogs

This prankster is going around Chicago asking people to sell their dog for up to $10,000. Most people aren’t willing to part with their beloved pooch, but some people consider his offer. This clip is a good introduction to the idea of willingness to sell and people’s subject valuation of their possessions.

2017 0

NBA Marriage Proposal Fail

It takes a lot of courage to propose to your partner in front of thousands of on-lookers and most of the time the answer, at least in public, is a solid “yes,” but this individual wasn’t so lucky. This clip is a good opening clip to use for opportunity costs, which is the value of the next best alternative. For the young lady, she quickly considered life with her partner and realized that the opportunity cost outweighed the benefit.

If you were the young man proposing, what would you rather be doing at that moment than what he’s going through? Instead of purchasing the engagement ring (average of $6000 in the US), what would you have spent that money on?

Thanks to Greg Caskey for the suggestion!

2017 0

How to Make Everything: A $1500 Sandwich in Only 6 Months

This is a great clip to talk about opportunity costs and gains from trade. The author goes through the process of making an entire chicken sandwich from scratch. I often open lecture asking students how much it would cost them if they did it themselves and then we watch this video.

2017 0