Case Study #1
The Case of the Mysteriously High Prices.
1. Artificial Scarcity: What factors have come into play in creating a higher scarcity in diamonds than actually exists?
2. Describe the social factors that the De Beers cartel has used in order to increase demand for diamonds. Who are their targets and how have they managed to sell them on the buying of diamonds?
3. What is the future of diamonds? How will increased mining affect the value? If replacements are made for a symbol of marriage, what might appear instead?
Case Study #2
The Case of the Shifting Demand for Foods
1. Chilean Sea Bass went from zero to hero in the culinary world. Cite evidence to show why it had such a sharp rise in demand.
2. Spam has survived many ups and downs over the years showing remarkably flexible utility to different groups. Using what you know about supply and demand, explain Spam’s history in terms of its usage and who has used the product. Look to specifically describe the shifts!
3. Both the Chilean Sea Bass and Spam have been products that were once considered lowbrow or even inedible consumables. Consider products (not necessarily food items) on the market today and think critically if you have seen other products rise significantly in “coolness” or demand. Describe two and how you have seen them change.
Case Study #3
The Case of the Shocking Low Wages.
1. Explain the rationality of choosing drug dealing over other professions for the “foot soldiers” in Chicago. Consider incentives, opportunities, labor pool, competition, and other economic factors. (Obviously some rationality exists because supply of labor exceeds demand for such positions).
2. Explain the irrationality of choosing drug dealing as a profession. Cite specific evidence.
3. Trace the history of crack cocaine. What key factors in economics helped spur the usage of the drug? Consider availability, substitutes, consumer pool, sellers, etc.
Case Study #4
The Case of Why Classic Brands Still Fail
1.For each of the product failures, what was the key factor that was missed with consumers? Why do you think the business originally went with the idea?
2.Consider the wider market. What other products can you think of that could be classified as “failures?” What makes these failures to you.
Case Study #5
The Case of Why So Many, In a Land of Extreme Riches, Save so Little
1. What were some of the key reasons why Gabler (and others) found himself in such dire straits? For these reasons, what were other factors that helped hide his precarious financial situation?
2. As you prepare your own Life Plans, we want you to think positively about our own goals and situations – yet we are aware that often things don’t work out exactly like we plan. Nobody plans to have their job replacement by automation or have their wages stay stagnant. What lessons can be taken away from Gabler’s experiences that would be wise to consider for your own future?
Case Studies on the Radio
Selections from Planet Money
For each of the assignments, you select one of the stories to listen and respond to. The availability of stories is simply trying to allow you to choose a story that you think you'll find interesting. Happy Listening!
1. Mr. Jones’ Act – What happens when strange government regulations permit normal activities in transporting goods? The Jones Act has affected shipping in the United States for a hundred years, yet remains on the books for interesting reasons.
Response Question: Is it time for a repeal of the Jones’ Act? Are critics of the Jones Act not considering the positives for the country? Respond by sharing your feelings about where the country is in regards to the opinions shared on both sides. Ultimately – how do you fall on this issue and why?
2. Water’s Worth – Many resources are scarce, but few more so than water in many places in the world. Yet, for places with plenty of water, what happens when there is a sudden scarcity? One country finds out the hard way – and pays a serious price, even as the dollars roll in. http://www.npr.org/sections/money/2016/06/17/482459229/episode-706-waters-worth
Response Question: Lesotho made a long term decision due to their need for money, yet they have forced themselves into at least a short term crushing situation with lack of water. How should they go about solving this issue both now and in the long term?
3. How Much is a Firefighter Worth? – Firefighters are fighting a losing battle: higher costs and fewer fires to fight. How can communities rethink the firefighting job and successfully pay for their services?
Response Question: If you were in charge of a local government, what recommendations would you make to help solve the crisis with firefighters? Would increased taxes be the answer? Public-Private partnerships? Redesign of what the career looks like? Different infrastructure from which the firefighters work? Explain your decision making process and why you chose what you chose.
4. Curse of the Black Lotus – Scarcity affects everything in society, even our games. Magic the Gathering could have been a flash in the pan strategy game in the 1990s, but with smart management, they have managed o have lasted over twenty years. How did they do it?
Response Question: Most games or collectable items (like sports cards or Beanie Babies) tend to fail spectacularly in the long run due to competing interests between the producers of the good and the speculators and players. Describe how Magic the Gathering avoided this issue and then from your own knowledge describe any product/good that had a sharp rise and even sharper fall.
1. The Sewing Robot – For decades the American textile industry slowly moved overseas where cheaper labor lowered costs dramatically. Some have said these jobs are gone forever, and maybe they are right, but could automation bring textile work back to the United States?
Response Question: Is automation the answer that the United States needs, or does the loss of jobs either way mean we should simply move into other areas of production or employment?
2. How to Make it in the Food Truck Business – Brick and mortar buildings were the norm for restaurants for years, and despite hand pushed food carts in urban areas being a long time tradition, food trucks are a fairly new business model. What are the factors that go into whether a food truck can make it on the streets in the modern era?
Response Question: Based on the story, what key limitations or benefits do you feel will most impact that food truck industry in the upcoming years? Is there a future in Food Trucks or is this just a temporary urban phenomenon?
3. Why the Price of Coke Didn’t Change for 70 Years – Consumers paid the same price for a bottle of Coca-cola for seventy years. How was this price stability possible in a society where cost of inputs went up? http://www.npr.org/sections/money/2015/11/18/456410327/episode-416-why-the-price-of-coke-didnt-change-for-70-years
Response Question: The conditions that were necessary for Coke’s strange price stability are rare, but how did the price help the longevity of the Coca-Cola brand?
4. The Chocolate Curse – All chocolate starts with cocoa, so when cocoa sees both a massive demand shift upward and is threatened with diseases, what is the end result? Will we run out of chocolate?
Response Question: Consider the product of “chocolate” in this story. What might be a potential alternative for the crisis that is facing the chocolate industry?
1. The Art of Living At the Poverty Line – How could a woman on the poverty line afford to take her son on an island vacation? Is it possible to make ends meet when making wages that are so small? Listen to the story of one family who is making magic happen out of every opportunity given to her.
Response Question: How do you feel about this woman’s abilities to get things done with so little money?
2. Video Gaming the System – Fictional video game currency was never really meant to be translated into the real economy... until it was. Often prohibited by game companies, the practice remains rampant, especially in developing or struggling economies. How do citizens in these economies use games both new and old to combat real life economic challenges?
Response Question: Why are the games in question such good vehicles for individuals to gain actual usable currently in the "real world?"
3. A Mall Divided – Valley Fair mall is a local shopping place for many San Jose residents, but it’s also a mall known to some across America… for a very strange reason. The mall is actually in two cities, and after San Jose raised the minimum wage above Santa Clara’s minimum wage, the idea of what people made on the job suddenly got a lot more interesting.
Response Question: Should wage level be a city issue? The state of California is in the near future going to raise the minimum wage up above either city, leaving this issue moot, but no doubt future occurrences will arise in other states as cities try to solve social crisis’ when larger government do not sufficiently do the job. What would your response be to such a situation in businesses on both sides came to you for advice?
4. Why We Work So Much – The late, great John Maynard Keynes once predicted that due to productivity and technology, humans in our time would work minimal numbers of hours in any given week. Yet despite tremendous gains in productivity, we now seem to work more than ever. What is leading to more hours on the job for Americans in the 21st century?
Response Question: Some economists in our era are now predicting fewer work hours for Americans in future generations due to automation. Could automation lead to the world that Keynes thought we would live in? And if so, what would humans do with their time as a result? What would society be like?
5. Bobby Bonilla Day - Professional sports are filled with terrible contracts, signed when teams thought a particular player was going to be amazing, and turned out to be something less. No contract has popped as a bad one as Bobby Bonilla's 2000 contract with the New York Mets. Retired Bobby still making millions a year? Why???
Response Questions: Based on what was shared, were the Mets actually smart to play Bobby millions years after he retired, or was this contract indeed the worst ever established by a team?
1. The Fondue Conspiracy – We have all heard about drug cartels, but is may be astonishing to think that there was once a cheese cartel. This very true and recent cartel was active in Switzerland and may surprise you
Response Question: The goals of the cartel may have been positive, but who were the losers in the strange fondue conspiracy? Can cartels ever serve the best interests of all of the people? Describe what might have happened in the absence of the cheese cartel.
2. The Future of Work Looks Like a UPS Truck – UPS has tried to monitor nearly every physical move that drivers make on their runs. All of this monitoring has led to incredible amounts of data that tries to alter the methods that UPS has their drivers follow. From unlocking doors from a distance to warning about dogs at residences, UPS is seen as a business of the future – but what’s the end of this story?
Response Question: How technological can work get before it is totally automated? Describe the pros and cons of such a uniform and robotic system that UPS is implementing – consider the customer, the worker, brand relationship, and so on.
3. Is a Stradivarius Just a Violin? – For generations, the Stradivarius violins have been the standard for greatness in violins. Violin masters have paid millions for the ownership of these rare gems, they have been the target of brazen thefts, and are often known to people that have never played a note on a violin. What if a Stradivarius was just another violin? Why do we put such a premium on the sound?
Response Question: Is “premium” just an allusion with most products? Many customers pay extremely high prices or rates for services that they see as having a higher quality – but when put to the test, many of these products fall flat. Explain why you think this is, and what do customers get out of buying such luxury items that might not be all that different after all.
4. Hard Work Is Irrelevant – How hard would you work… if your hard work put you out of business? Welcome to the conundrum that is labor in many industries. Do we reward working hard, or work that is needed? This is the story of Netflix and the shedding of many staffers that worked their way out of their jobs.
Response Question: What is the value of hard work? Should the only thing that matter be results? Apply this to work, school, relationships, etc. Then evaluate whether you think Netflix is in the right, or in the wrong.
1. Why Did the Job Cross the Road – We have all heard about companies moving to another state or country to try to save money, but how ridiculous is it getting out there? This story looks at the bizarre back and forth moves of two U.S. states who see so many businesses switch sides, it’s almost hard to tell who you have and who you don’t!
Response Question: Is there any sense to all this madness? How self defeating is all this tax competition? Would the United States be better off with one set tax policy instead of leaving it up to the state and local governments to decide for themselves?
2. The Birth of the Federal Reserve – The many conspiracy theories about the Federal Reserve have certainly been helped along by the secretive nature in which the Federal Reserve was established. This story explores the very secretive nature of the meetings and some of the bizarre emphasis on keeping things hush hush. The illuminati do not want you to hear this story.
Response Question: Why such secrecy for the creation of the Federal Reserve? Do you feel that there would be fewer concerns and more understanding of the Federal Reserve if there was more transparency in the creation of the Fed?
3. The No Brainer Economic Platform – What would the ideal candidate be for the economists of America? We know that economic decisions and political decisions aren’t usually matched up very well. If we were able to design a Presidential candidate with only economics in mind, what would that President run on?
Response Question: Describe why the ideal candidate would likely perform so poorly in an election – even with such wise economic moves. What keeps these ideas grounded?
4. The Great Inflation - Vowing to slay inflation, Chairman of the Fed Paul Volcker did just that, and in the process became one of the most unpopular people in America and seemingly plunged the economy further into recession... but he was right.
Response Question: Why wasn't Volcker's idea believed by business professionals, everyday people, politicians, and others? What took so long for people to come around?