Labor · Saul

Opportunity Cost of Interviewing

Jimmy is invited for an interview regarding a copier salesman position with Neff Copiers. During the interview, it is noted that Jimmy’s resumĂ© shows his previous but recent employment as a lawyer and the interviewers are curious why he would want to switch into sales. From their standpoint, going from a legal career into copiers’ sales seems like a demotion.

Upon making his case, Jimmy takes the chance to analyze his decision from a cost-benefit analysis standpoint. He admits that he doesn’t have traditional sales experience, which would definitely be a significant cost to Neff copiers, if he gets employed by them. The tradeoff is that his skills as a lawyer are transferable to a sales job because it still involves “selling” to different people. His argument is essentially that the skills he gained as a lawyer are general, human capital, which can be transferred to a more traditional sales role.

Before leaving, he decides to come back and make his case using the foundational economic concept of opportunity cost. While they wait to interview more candidates, they are giving up that opportunity to see if he can really do it. When hiring candidates, there are a variety of quasi-fixed costs, and many students don’t recognize that the cost of hiring a worker goes beyond their wage. The second half of this scene provides and excellent chance to explore the opportunity cost of not only the missing salesman, but also the two managers who could be doing other things with their time. Jimmy’s story about his experience with copiers is an attempt to make the opportunity cost of waiting seem more real to the two managers.

Once Jimmy gets the job he highlights how dumb the two are because they know nothing about him. He argues that there they haven’t done their due diligence in hiring because he could be a crazy person. This level of asymmetric information in labor markets is why the search process can take longer than traditional competitive models suggest.

Looking to emphasize jus the human capital aspect and transferability of skills? Check out the clip that includes only the beginning of this scene.

See more: Asymmetric information, Better Call Saul, cost benefit analysis, general human capital, hiring costs, human capital, interviewing, labor, opportunity cost, search costs, skill transferability, specific human capital

Labor · Saul

General Human Capital from a Legal Career

Jimmy is invited for an interview regarding a copier salesman position with Neff Copiers. During the interview, they not that Jimmy’s resume shows his previous employment as a lawyer until shortly before the interview and they are curious why he would make such a drastic change. From their standpoint, it seems like a demotion to go from a legal career to a sales job.

Jimmy takes a chance to analyze his decision from a cost-benefit analysis standpoint. He admits that he doesn’t have traditional sales, which would definitely be a cost of hiring him. The tradeoff is that his skills as a lawyer are transferable to a sales job because it still involves “selling” to different people. His argument is essentially that the skills he gained as a lawyer are general human capital and can be transferred to a more traditional sales role.

This scene is the shorter version of a longer scene, which includes Jimmy arguing in favor of his employment from an opportunity cost perspective. If you have the time, check out that clip!

See more: Better Call Saul, cost benefit analysis, general human capital, human capital, interviewing, labor, skill transferability, specific human capital

Foundations · Growth · Mike

Power Tool Advantage

Mike is sent to do some snooping, but he’s going undercover as a repairman that’s been hired. The customer is averse to electricity and had requested that no power tools be used. Mike knows this, but needs the customer out of the area so that he can snap some pictures. He brings power tools to ensure that the customer gives him some privacy. From an economics standpoint, Mike makes a compelling case for power tools as it relates to productivity.

He could make the repairs things the old-fashioned way: “going at it like Fred Flinstone.” The tools, as Mike explains, helps turn a two-day job into a one day job. Capital investments and technology helps producers lower the cost of producing items. From a PPF standpoint, it allows the curve to shift outward and producers to be able to produce more stuff given a fixed amount of time.

See More: Better Call Saul, capital investment, efficiency, growth, production, technology