Archive for the ‘Elasticity’ Category

After years in the making, Oculus Rift arrives   Leave a comment

oculusLink: http://www.marketplace.org/2016/03/25/world/after-years-making-occulus-rift-arrives

Summary: Oculus Rift headsets for virtual reality are now in the market! Facebook owns Oculus and will be looking to take to Oculus Rift to the mainstream market next. In this podcast, Marketplace discusses the prospects and challenges ahead for these pioneers in virtual reality economy.

Original Date Aired: March 18, 2016

Length: 1 minute 53 seconds

Why The Price Of Coke Didn’t Change For 70 Years   Leave a comment

price of cokeLink: http://www.npr.org/sections/money/2015/11/18/456410327/episode-416-why-the-price-of-coke-didnt-change-for-70-years

Summary: The Planet Money team investigates how the price of a Coke was able to stay at 5¢ for 70 years. In finding the explanation, the Planet Money team also considers the reasons for Coke’s global success.

Original Air Date: November 18, 2015

Length: 19 minutes 7 seconds

Posted March 24, 2016 by ndelmonaco1 in Elasticity, Planet Money, Production costs

Tagged with , , ,

The Curse of the Black Lotus   Leave a comment

blacklotusLink: http://www.npr.org/sections/money/2015/03/11/392381112/episode-609-the-curse-of-the-black-lotus

Summary: Using common goods like magic cards, the NPR team demonstrates market bubbles and how they work as well as how one company deflated theirs.

Original Air Date: March 11, 2015

Length: 16 minutes 56 seconds

Why Textbook Prices Keep Climbing   Leave a comment

textbooksLink: http://www.npr.org/blogs/money/2014/10/03/353300404/episode-573-why-textbook-prices-keep-climbing

Summary: Something strange is going on in the textbook market. The price has steeply increased over the past decade–and they’re only getting higher. There is a disconnect between the chooser (the professors) and the buyers (the students). Technically, the professor is the consumer, and they’re spending their students’ money. The podcast offers the opposite: high school textbooks, where costs are kept low because the books are paid for by the schools.

Original Air Date: October 3, 2014

Length: 14 minutes 56 seconds

Discussion Question/ Prompt: Propose a solution to the rising textbook price problem. (Example: a price ceiling? professor awareness of prices? incentives for lower prices?)

How To Steal A Million Barrels Of Oil   Leave a comment

nigerian stolen oilLink: http://www.npr.org/blogs/money/2014/10/29/359624435/episode-578-how-to-steal-a-million-barrels-of-oil

Summary: The Nigerian Internet hosts many ads for stolen oil, inspiring the question: how? Why?  Nigeria has one of the top oil reserves, and it is controlled by the government. They lose about $10 million a day from oil theft. This podcast dissects how they get away with it.

Original Air Date: October 29, 2014

Length: 19 minutes 30 seconds

Discussion Question: The podcasts says that this problem is for the Nigerian government to solve. Should it be an international issue?

Prompt: The podcast does not reflect on the legally sold oil, and the effect the stolen oil has on that market. Write how you think the stolen oil would change the market for legal crude oil in the international arena, paying specific attention to the quantity and the prices.

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.

Link: http://www.npr.org/blogs/money/2014/01/24/265396928/when-a-65-cab-ride-costs-192

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?

How Stuff Gets Cheaper   Leave a comment

stuff cheaperLink: http://www.npr.org/blogs/money/2014/11/28/366793693/episode-586-how-stuff-gets-cheaper

Summary: The Planet Money team looks at how some things get cheaper over time. The podcast hosts visit a company called Monoprice, whose job it is to find out ways to make things cheaper–in other words, a lot of detective work.

Original Air Date: November 28, 2014

Length: 14 minutes 11 seconds

Prompt: Write a brief letter to Monoprice with your thoughts on their job. Is it efficient? Is it cost-productive?