Teaching Economics Using Media Active Learning October

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 1 D concert? A. $0 (applaud) B. $65 (bark) C. $135 (cough) D. $200 (whistle)

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 Le. Bron 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 e. Bay 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. 32

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

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 Jo. Ann each buy one box of cereal at the local grocery store. Jo. Ann 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?