In this short talk Google’s chief economist, Hal Varian, does some back of the envelope calculations of the value of Google search. Varian touches on auctions, the MR=MC condition, and consumer surplus calculations, all at a low-tech level suitable for advanced principles or intermediate micro students.
Is Bruce Wayne dressing up as Batman the best way he could be spending his time and money? Probably not; this video clip from Cracked magazine addresses this question, becoming a fine example of opportunity cost in the process. It’s seven minutes long so if you want to skip ahead for time, the most relevant part begins at 1:58 and ends at 3:04.
Saturday Morning Breakfast Cereal has a comic with a similar theme, but with Superman.
In this short video, Jonathan Sacks, the Chief Rabbi for the British Orthodox synagogues, explains how the “beautiful idea” of comparative advantage promotes peace, cooperation and tolerance among all people. This is a good video to stimulate classroom discussion.
Here are three videos drawn from my course on development economics with Tyler at MRUniversity.com. The first video steps through the theory of comparative advantage as presented in Modern Principles. A question in the video is left for “homework” and the second video gives the answer. Students watching these videos will be able to learn how to find opportunity costs, discover which country has a comparative advantage in what good and propose trades that make both countries better off. The third video presents some sources of comparative advantage.
In our chapter on monopoly in Modern Principles, Tyler and I give an intuitive account of the double marginalization problem.
Monopolies are especially harmful when the goods which are monopolized are used to produce other goods. In Algeria, for example, a dozen or so army generals each control a key good. Indeed, the public ironically refers to each general by the major commodity that they monopolize—General Steel, General Wheat, General Tire, and so forth.
Steel is an input into automobiles, so when General Steel tries to take advantage of his market power by raising the price of steel, this increases costs for General Auto. General Auto responds by raising the price of automobiles even more than he would if steel were competitively produced. Similarly, General Steel raises the price of steel even more than he would if automobiles were competitively produced. Throw in a General Tire, a General Computer and, let’s say, a General Electric and we have a recipe for economic disaster. Each general tries to grab a larger share of the pie, but the combined result is that the pie gets much, much smaller.
In our course on Development Economics at MRUniversity we provide a more detailed explanation using graphs. This material is a bit advanced for a typical principles class but it would be useful in a course on industrial organization or for advanced students interested in more detail. Fell free to use the video in any way that you find useful.
At Marginal Revolution University, our online education platform, Tyler and I have created a course on Development Economics. It’s a complete course and it is open to the world for free. A number of the videos from that course are also useful for teaching micro or macro principles.
We have four videos on the Solow model, for example. The first video introduces the model exactly as it is taught in Modern Principles. In the second video we demonstrate some of the comparative statics of that model. The first half of the second video uses only the model from MP, in the second half we introduce population growth which requires just a slight change in notation and interpretation.
In the third video we look at the model and data and the fourth looks at productivity. For teaching the model in Modern Principles the first two videos and the beginning (up to 2:46) of the third video will be very useful. For more advanced students, of course, all of the videos may be appropriate. Feel free to use these videos in any way that you find useful, e.g. you could assign them for homework or use the videos as a tutorial.
Here are the first two videos. You can find the third and fourth Solow model videos at MRUniversity in the Development Economic Course under the section Economic Growth 2.