Saturday, July 5, 2008

A Stand-up Quiz

When I teach Economics, my class will be fun. If my students don't learn Economics, they will fail my class. If they don't learn how to have fun, they will fail at life. I think I might give a quiz to my students based on the SECOND HALF of this stand up routine by Nick Thune. Showing my students the first half would probably be grounds for my dismissal from the teaching profession. (For those who are not fans of the dirty jokes, I would suggest skipping to the middle of the clip)

Stand Up Quiz (feel free to submit answers):

1. Thune makes fun of the expression "kill two birds with one stone" because in fact stones are abundant relative to birds. The expression actually applies to what scarce resource?

2. Thune's lack of internet is an example of what collective action problem? Explain.

3. What has happened to the real price of an Arby's Beef n Cheddar since the deal was first introduced?

4. What else could explain Arby's ability to continue offering the 5 for 5 deal? Provide two.

5. Why is it unlikely that Arby's has been "highballing" for 14 years?


mknox said...

Hey teach- do I pass?

1. The expression "kill two birds with one stone" can apply to limited material/monetary resources. It could also apply to (the arguably scarce resource) time.

2. The collective action problem is free riding. If enough people contribute, everyone gets what is wanted. But if nobody contributes, expecting others to do so, nobody achieves a desired result.

3. The real price has probably decreased.

4. Arby's five for five deal is such a deal it provides free, word of mouth, advertising, which is worth more than potential losses. Since the promotion's introduction, more people buy the product, multiplying smaller profit into a worthwhile sum.

5. There's something called competition. If Arby's was really "highballing" a look a competitors pricing should have clued Thune in.

Josh Knox said...

Four out of five is pretty good. Economies of scale explain why Arby's was first able to offer the 5 for 5 deal, but it doesn't explain How Arby's could lower the REAL price of the deal over time (offer Beef n Cheddars at the same price over 14 years in spite of inflation).

The answer I was looking for was that Arby's could either reduce the quality of their Beef n Cheddars, or it could utilize some new technology to produce them at a lower cost.

Josh Knox said...

As a side note, I just saw an Arby's add offering 2 Beef n Cheddars for 4 dollars. I guess Arby's advancements in technology couldn't keep pace with inflation.

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty