Archive for the ‘Consumer surplus’ Category

What do young buyers want in an auto, anyway?   Leave a comment

young buyersLink:

Summary: At the 2016 Chicago Auto Show, the Marketplace team looks at the demand of the millennials and the response from the auto industry. Millennials are pragmatic and tech savvy. Toyota cannot sell its Scion brand and changes strategy to accommodate consumers that make up a third of the US auto market.

Original Air Date: February 19, 2016

Length: 4 minutes and 2 seconds

Posted September 1, 2016 by noorul94 in Consumer surplus, short length, Technology, Utility

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The midlife economic anxiety crisis   Leave a comment


Summary: According to the Marketplace Economic Anxiety Index, 35-54 year olds are the most worried age group in the U.S. Children’s college tuition and retirement loom over these folks and they also felt the aftershocks of the housing crisis and stock market crash. Marketplace speaks to a couple about their economic concerns and decisions.

Original Air Date: March 18, 2016

Length: 5 minutes and 4 seconds

When A $65 Cab Ride Costs $192   Leave a comment

Update: Several readers commented on the route shown in the map above. Lisa Chow took the car for purposes of this story, and chose a route that began and ended near NPR's New York offices.


Summary: This podcast sheds light on supply and demand as well as elasticity using the well know car service Uber.

Original Air Date: January 24, 2014

Length: 4 minutes 9 seconds Note there is a longer version that addresses issues of fairness, rationing by time v. money, different profit maximizing strategies by firms 

Discussion Prompt (1) for short or long  version: Think about yourself as a consumer of Uber/Lyft services– how elastic is your demand for uber? How do you know? What factors do you think make your demand for an Uber ride more or less elastic? You can think about specific times, or you can think about comparing yourself to other people whose elasticity of demand might be different.

Discussion Prompt (2) for short or long  version: This podcast focuses on the topic of ‘surge pricing’: how does this relate to price elasticity of supply? Is the supply of Uber drivers price elastic or inelastic? What factors might impact that?

Discussion Prompt (1) for long version: Planet Money asks this question: If this is how markets generally work (ex.  Stock market, copper market), why is what Uber’s doing considered so strange?  This podcast is from 2014 (useful to us because it explains Uber in detail because it was new). In the time that has passed, do you think people have come around to this ‘economic way of thinking’ about surge pricing? Why, why not?

Discussion Prompt (2) for long version: The podcast compares the pricing strategy of Home Depot with ‘ice salt/melt,’ where they don’t change the price but they do run out, to the strategy of Uber where they raise the price rather than ‘run out’.   Economist Richard Thaler notes that these choices represent different profit maximizing strategies by firms focusing on long-run vs. short-run strategies.  What does he mean here? How do these actions represent different profit-maximizing strategies by these firms? Do you think one is ‘more fair’?

Written Prompt: Read this related article: Cohen, P., Hahn, R., Hall, J., Levitt, S., & Metcalfe, R. (2016). Using big data to estimate consumer surplus: The case of uber (No. w22627). National Bureau of Economic Research. Part of what makes this article innovative, is that it provided a ‘real-life’ consumer surplus estimate drawn from actual consumer data.  Why do you think that it might have been hard to determine consumer surplus in real life before Uber (and similar apps/services)? Can you make any other links between this article and the podcast?

Free Money   Leave a comment

free moneyLink:

Summary: This podcast discusses arbitrage (free money), using the example of used textbooks. Arbitrage (free money) is a risk-free way to buy low and sell high. You can find one thing that’s selling for two different prices, and exploit the mistake.

Original Air Date: November 7, 2014

Length: 14 minutes 29 seconds

Prompt: Imagine you find an opportunity like the one discussed in the podcast. Write an outline of how you would go about this discovery, and what your plan of action would be.

Discussion Question: A woman in the podcast said their practice was immoral. Do you agree or disagree? Is what these two men are doing wrong? Use economic thinking in your discussion.

Lebronomics   3 comments

Lebron James in actionLink:

Summary: Discussion of the potential  “happiness” impact of Lebron James’ decision whether to leave Ohio for Miami, LA, or NY. Also a discussion of aftermarket ticket sales.

Original Air Date: July 9, 2010

Length 25:42

Main story content begins: 3:36

“Planet Money indicator” Discussion of China / US currency exchange, currency manipulation debate: 1:44 – 3:23

Discussion Prompt (1) : How does this podcast relate to the concept of consumer surplus? Based on the idea of utility/happiness introduced in the podcast in what ways (and for whom) might utility have been increased by Lebron’s decision? In what ways might it have been decreased?

Follow-up Prompt (1): Consider the idea of utility as set out in the podcast. What do you think are the challenges of measuring ‘utility’?  In what ways is it a useful and important measure/concept?  Can you think of something else that we can measure that would approximate measuring utility since it can be challenging to measure utility itself? Can you find an example of ‘diminishing marginal utility’ in this podcast or think of one related to the ideas in the podcast?

Discussion Prompt (2): What do you think about the idea of a gross domestic happiness index? What might be the challenges to measuring happiness? What examples of measures or indicators of happiness can you imagine that might make up such an index?

Follow-up Prompt (2):   How might it be useful for a government to think about measuring domestic happiness in this way?  How might it be used in a way that was useful or in a way that was not?