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Economics is Fun Video Series
By JLP | February 15, 2012
Okay, this is cool. One of the organizations I follow on facebook, posted a video from YouTube series called “Economics is Fun.” I searched YouTube and found seven of the videos and organized them here for your enjoyment. They’re short (each video is around 2 minutes long) and easy to understand. I wish the sound was better.
Share these with your kids. Let’s make a difference!
Economics is Fun – Part 1: Value
Economics is Fun – Part 2: Price
Economics is Fun – Part 3: Specialization
Economics is Fun – Part 4: Trade
Economics is Fun – Part 5: Time
Economics is Fun – Part 6: Money
Economics is Fun – Part 7: Middlemen
Topics: Economics | 6 Comments »
February 15th, 2012 at 10:31 am
Great find, will share with the kids! However, I have a disagreement with the second video (as far as I’ve gotten so far). I agree that prices work they way described (in video 2) if everyone had roughly the same amount of wealth.
It breaks down when the rich/poor gap is large, which has been increasing for a few decades (see Gini coefficient).
For example, take a hypothetical item — the poorer person needs to ask himself: “is it worth 1/100th of my wealth to purchase the item.”. The richer person needs to ask himself: “is it worth 1/100,000th of my wealth to purchase the item”. This is because the rich person has 1000x the wealth of the poor person (as an example).
The rich and poor both value their wealth 100%, but since the poor person has less raw dollars (currency), he values each of his dollars more than the rich person values the same number of raw dollars — which eventually get reflected in the price of goods.
Lesson: don’t attend auctions (or purchases things) where people who are more (relatively) wealthy are known to attend/shop. Your dollars just won’t be able to compete there.
February 15th, 2012 at 12:19 pm
Maybe with some products this is true. However, think about the different products that people have to choose from.
Take purses for instance.
I bought my wife a purse for Christmas a couple of years ago. When I walked into the purse department at Dillard’s I was amazed at the all the different prices. I could choose from a $40.00 purse or a $400 purse.
One could argue that the quality of the $400 purse is that much better to justify paying 10x the price of the $40 purse. However, the person without the means to buy the $400 purse, could still buy the $40 purse and have a purse.
Does that make any sense?
For necessities, what you’re saying makes sense.
February 15th, 2012 at 4:03 pm
Yeah, I agree. There is a market for anything, and at every price point. Take for example the $1,000+ HDMI cables (I love reading the reviews for that thing on the BestBuy website).
February 15th, 2012 at 5:58 pm
Thanks for assembling these videos here. I watched a couple of them that were on the Samizdata blog, but didn’t know there were more.
February 16th, 2012 at 9:57 pm
There is another aspect to that, BG. Many things that are expensive early, such as mobile phones, were only available to the rich. As they bought more, the unit prices came down to the point that now even poor people have them. In fact, many developing nations are not even putting in landlines, but cell towers instead.
The ability of the rich to pay more provides a market for initial runs of sophisticated products, and the prices drop with mass production. This is the opposite of the auction scenario, in which there is a limited supply (usually one).
February 18th, 2012 at 7:58 am
Excellent.