Teaching economics using clips from the AMC hit show, Breaking Bad.
After having the family car repaired at a local maintenance shop, Walt decides its time to get rid of it. He’s worried that his car is too easily recognized and offers to sell it to the shopkeeper for $50. While Walt Jr. finds this crazy, Walter is willing to get rid of it even if it’s well below what he could get somewhere else.
See more: consumer surplus, demand, preferences, subjective benefits, willingness to pay
Hank is temporarily disabled and has been collecting rocks to pass the time. Walt Jr. and Hank are both impressed with a pink rock, which Walt goes on to describe why the rock gives it that color. This is a good example of a positive statement, which is a testable statement that has a right or wrong answer. It is not based on some value judgement (like the rock looking cool).
See more: normative analysis, positive analysis
In an attempt to get Walt Jr to like him again, Walter tries to buy him a used car. Recognizing that his dad is trying to purchase his approval, he convinces his dad to buy him a new sports car instead. This clip shows Walter’s willingness to pay for his son’s happiness.
See more: differentiation, elasticity of demand, interdependent utility functions, product characteristics, subjective preferences, utility, willingness to pay
Jesse calculates that Fring is earning $93 million from Jesse and Walter producing meth, but he doesn’t feel adequately compensated. His focus on Fring’s revenue rather than his profits is causing him to feel vastly underpaid. What is Jesse forgetting? What about costs with the lab, packaging, distributing, and guarding the meth. In addition, the risk that Gus (the owner of the methamphetamine operation) takes represents an additional cost of doing business.
See more: transaction costs, fixed costs, profit, underground economy, profit maximization, production costs, revenue, labor, risk premium, variable costs
Family meals are a great chance to see all the different complements and substitutes in a market. While milk and cereal are often consumed together (complements) there are other options people can decide upon to fulfill their breakfast need. Walter Jr opts for eggs and bacon (substitutes). The decision process involves weighing costs and benefits of alternatives.
See more: complements, inputs, substitutes, tradeoffs, utility
There’s a lot of different complements and substitutes that go into a meal. Fries and ketchup are complements, while sushi and burgers are substitutes. The collective decisions we make are influenced by a variety of different products and aren’t isolated to a single market.
See more: complements, inputs, substitutes, tradeoffs, utility
There’s an arrest on school property, and Hank shares why he believes the janitor was responsible for the recent thefts at the school. The theft corresponds to popular equipment used to make meth, and the janitor (Mr. Archilleya) had a past record for possession of marijuana, had access to the school, and during a search of his vehicle, had possession of marijuana. Skyler is confused how Hugo could even get a job at a school with his record, but Walt notes Hugo doesn’t seem like a drug dealer. This is a classic example of mixing correlation with causation. Just because Hugo has markers that could potentially make him a criminal, it doesn’t mean that it would cause him to be willing to steal from his employer. Society often mixes correlation with causation, which results in some unfortunate outcomes.
See more: causation, correlation, negative externalities, signaling, statistical discrimination, unintended consequences
The Economics of Breaking Bad 