Teaching Economics
Using Media & Active Learning
October 19, 2013
CHARITY-JOY ACCHIARDO & G. DIRK MATEER
Music and
Economics
Ben Stein,
The Face of Economics?
Ferris Bueller’s Day Off
T-mobile commercial
3
Part 1
THE ECONOMIC WAY OF THINKING
Scarcity
How do we decide
what to do/buy?
How do you travel?
THINK-PAIR-SHARE
How would you solve the previous example if you
do not know the value of the person’s time?
 Try to work this out yourself. (1 min)
 When I give the signal, form a small group
(2-3 people) and share your answers.
Write up your solution.
The Road Not Taken
– Robert Frost
Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth.
More practice!
$200
$135
What is your opportunity cost
of attending the 1D concert?
A.$0 (applaud)
B. $65 (bark)
C. $135 (cough)
D. $200 (whistle)
Incentives
Incentives
Unintended consequences
Good intentions do not
guarantee desirable outcomes!
Marginal Thinking
MB > MC
Making Decisions on the Margin
The Diamond-Water Paradox
Don’t confuse total value with marginal value!
Law of Diminishing
Marginal Utility
Why do pop singers typically
make more than top nurses?
>
Efficiency
Part 2
EXCHANGE AND TRADE
Voluntary Exchange
The Trading Game
Trade Involves Opportunity Costs
Comparative Advantage & Trade
Comparative Advantage & Trade
Should LeBron James
clean his own house?
Where did your shirt come from?
Poll
Discussion
Where do cotton
t-shirts come from?
Private Property Rights
What Makes eBay Work?
The Fishing Game
Fishing Game
(1) There are four contestants. Choose your champion!
(2) The game is divided into two rounds:
(a) The first 30 seconds:
- gold jingle bells are worth $0.01.
- purple jingle bells are worth $0.05.
- blue jingle bells are worth $0.10.
- silver jingle bells are worth $0.25.
(b) The second 30 seconds:
-gold jingle bells are worth $0.02.
-purple jingle bells are worth $0.10.
- blue jingle bells are worth $0.20.
- silver jingle bells are worth $0.50.
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Part 3
SUPPLY AND DEMAND
WHAT’S YOUR PRICE?
What is the most you would pay to see a concert
(favorite artist, best seats, etc…)?
The Law of Supply
What amount of money would be necessary to
get you to perform karaoke for us right now?
Equilibrium Experiment
You may not use violence to force a trade
Buy low, Sell high
Grab a slip and start trading!
You have 15 minutes
Do not trade fractional units
Questions? Just ask!
Carefully record all transactions
The Market is Open
Time Left:
www.online-stopwatch.com
DECODING THE MYSTERY
Hard to Find
(shortage)
In Equilibrium
Easy to Get
(surplus)
The Hudsucker Proxy
Price Ceilings:
A Thought Experiment
THINK-PAIR-SHARE
1. Will there be more
or less for sale?
2. Will this cause a
shortage or a surplus?
4. Will the quality rise 5. Is there a way to
or fall?
rename the good to
avoid the law?
7. Will there be an
increase in self
sufficiency?
8. How will politicians
handle attempts to
circumvent the new
law?
10. Would you buy
11. Will the new law
illegally produced TP? cause more or less
discrimination in
society?
3. Will the size of a
typical roll increase or
decrease?
6. Could you tie the
purchase of the TP to
another (more
expensive) good?
9. Will the
opportunity cost of
finding TP rise or fall?
12. Who are the
winners and losers?
Part 4
THE ROLE OF PROFITS & LOSSES
SEINFELD – CAFÉ FAILURE
IT’S ALWAYS SUNNY IN
PHILADELPHIA – Kitten MIttons
Entrepreneurship & Wealth Creation
Entrepreneurship & Wealth Creation
What do tennis balls
have to do with economics?
Entry INTO Markets: Harbucks
I LOVE LUCY – The Diner
The Dynamic Nature of Change
Allowing products
to fail (or be
replaced through
innovation) allows
for creative
destruction to
take place.
Ben & Jerry’s Ice Cream Graveyard
Part 5
PRICE DISCRIMINATION
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How Do Airlines
Make Higher Profits?
What should a firm do if it
can only charge one price?
I need five volunteers!
What happens if the firm is
able to price discriminate?
When firms price discriminate,
they earn more profit and
also serve more customers!
$
Perfect Price Discrimination
Season Ticket Holders Get Better Deals
Differentiating Your Customers
Next Restaurant
Pricier hotels - Mac or PC?
Price Discrimination Quiz
Are the following situations
examples of price discrimination?
Yes: Cheer
No: Boo
Price Discrimination Quiz
Bart and Lisa go to a club. Bart has to pay a
cover charge for entry, but Lisa gets in for free
due to a “Ladies’Night” special.
YES! This is price discrimination.
The product is the same, and the
price difference has nothing to do
with cost differences.
Price Discrimination Quiz
At Little Nero’s Pizza, the menu lists the following prices:
Cheese pizza = $ 8
Supreme pizza = $11
NO! This is not price discrimination.
The price difference exists in part due
to cost of production differences.
Price Discrimination Quiz
Lisa buys an economy class airline ticket for $400
and Bart buys a first-class ticket for $800.
NO! This is not price discrimination.
Bart may get extra drinks
and food which are additional
costs to the airline. Bart also gets a
comfy seat and more legroom.
Price Discrimination Quiz
Lisa and Bart both buy an economy class ticket
on the same flight. Lisa pays $83 less than
Bart because she booked 2 weeks earlier.
YES! This is price discrimination.
The product is the same, and the
price difference has nothing to do
with cost differences.
Price Discrimination Quiz
Jaime gets her oil changed at Cars N’ Stuff
for $30 and Katie gets her oil changed at
Automotives Incorporated for $25.
NO! This is not price discrimination.
Two firms are offering different
products. There may be quality and
cost differences.
Price Discrimination Quiz
Joe and Sheila each buy a ticket to the ballet and sit
together. Joe paid $5 less than Sheila because of a
student discount.
YES! This is price discrimination.
The product is the same, and the
price difference has nothing to do
with cost differences.
Price Discrimination Quiz
Flagstaff, gas price = $3.29
Tucson, gas price = $3.42
NO! This is not price discrimination.
Costs may be higher
to get gas to Tucson.
Price Discrimination Quiz
Mark and JoAnn each buy one box of cereal at the local
grocery store. JoAnn gets a $1.00 discount by using a
coupon.
YES! This is price discrimination.
The product is the same, and the
price difference has nothing to do
with cost differences.
Part 6
REALLY COOL RESOURCES
MEMES
Let’s go to the site!
Pinterest Economics
Kim Holder
www.economicsoftheoffice.com
www.criticalcommons.org
(more clips)
Joe Calhoun (a variety of very useful clips)
Adrian Fohr (film and tv clips)
Brian O'Roark (music animations)
dirkmateer
Why do people trade?