The Economics of The Office

Learning economics from the world's best boss

Huge Turnaround for Profit

Dwight corners the market on Princess Unicorn dolls! This is a good opportunity to discuss the relationship between expected future prices and changes in demand. Dwight knew that the demand for these dolls would increase as Christmas drew closer. Advanced students should be able to draw a supply and demand graph for this market and see that in the very short run the supply of this good is perfectly inelastic in the Scranton area. This makes the profit opportunity for Dwight even greater.

Season 5 Episode 11 "Moroccan Christmas"

Information and Market Efficiency (G14) Microeconomic Behavior: Underlying Principles (D01)

Dwight Jim

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FaLaLa CaChing

Dwight corners the market on Princess Unicorn dolls! This is a good opportunity to discuss the relationship between expected future prices and changes in demand. Dwight knew that the demand for these dolls would increase as Christmas drew closer. Advanced students should be able to draw a supply and demand graph for this market and see that in the very short run the supply of this good is perfectly inelastic in the Scranton area. This makes the profit opportunity for Dwight even greater.

Season 5 Episode 11 "Moroccan Christmas"

Information and Market Efficiency (G14) Microeconomic Behavior: Underlying Principles (D01)

Dwight

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Broke

Using this clip as a starting point, we can demonstrate and discuss the difference between fixed costs and variable costs.

Season 5 Episode 25 "Broke" Caution!

Production and Cost (D24)

Michael Pam Ryan

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The Surplus

It's the last day of the fiscal year at Dunder Mifflin and Michael must spend the last $4300 in his budget or lose it for all subsequent years. This clip illustrates the unintended consequences of perverse incentives.

Season 5 Episode 10 "The Surplus"

Microeconomic Behavior: Underlying Principles (D01)

Michael Oscar

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The Surplus: Part Two - Rent Seeking Behavior

Oscar and Jim team up with a few other employees to lobby for a new copier. Pam, Stanley and Meredith form a group to lobby for new chairs. Michael is the World’s Best Boss, and also the one who ultimately decides if the $4300 will be spent on new chairs or a new copier. Oscar and Jim waste valuable resources, time that they could spend working, to take Michael out for lunch to convince him they need a new copier. When they get back from lunch, Pam diverts time away from her job and toward chair-seeking efforts. Others go out of their way to open doors for Michael and bring him hot chocolate. All the employees allocate resources in an attempt to “win” the rent. These rent-seeking efforts and expenditures result in negative social value. Thanks to Lizzie Banks, an econ major at the University of Virginia, for suggesting this clip.

Season 5 Episode 10 "The Surplus"

Microeconomic Behavior: Underlying Principles (D01)

Michael Pam Stanley Kelly Jim Oscar Meredith

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