Concepts: Uncertainty, investment in physical capital
Background: Uncertainty is an important but complex concept that potentially severely affects economic outcomes. In the context of Club de Cuervos, the passing of Salvador Iglesias Sr. created uncertainty about the future of the local soccer team, and rumors of the club being relocated had emerged.
Question: Explain why and how the uncertainty created by the passing of Salvador Iglesias Sr. affects the club itself, but also the local economy of Nuevo Toledo.
Concepts: Debt financing, equity financing, bond, stock, human capital
Background: Starting a company is costly. Both Hakan and Memo are poor in the series and do not have the necessary funding to create their company. To find the money, Hakan tries to get a well-paid job at a large firm.
Question 1: What are Hakan and Memo’s financing options to make the initial investment?
Question 2: What would Hakan need to increase his chances of getting such a job?
Background: If Hakan opens his antique store with Memo, he will mostly do business with foreigners. Doing business with foreigners requires understanding how exchange rates work. In this clip, we can see the price of some Turkish sandwiches (Tost) on a price board. Some of them cost 7 Turkish Liras.
Question (Let’s use data): Compute the price in US dollars of a sandwich costing 7 Turkish Liras, using the currency exchange rate.
Categories: Macroeconomics, Finance, Money and Banking
Concepts: Equity financing.
Background: Leya urgently needs money for her company. She exchanges stocks in her company with her friends for an opportunity to get the money she needs.
Question 1: Why does Leya’s partner want equity in her company? Leya’s friend is not asking for bonds. What does that say about her expectations about Leya’s company’s future?
Question 2: If you were Leya, would you rather sell stocks or bonds? Explain the difference.
Concepts: Investment in human capital, Monetary and non-monetary costs, Risky investment, Nominal exchange rate.
Background: Polina is addicted to alcohol and just finished a rehabilitation program in a facility. Lyonya, her dad, is picking her up to bring her home.
Question 1: Define what an investment in human capital is. Provide two examples of human capital investment.
Question 2: Why do economists consider rehab an investment in human capital? Why some believe that rehab a risky investment?
Question 3: What costs are involved when somebody checks into a rehabilitation program?
Question 4 (Let’s use data): Lyonya has to pay 52,902 Russian Rubles to cover Polina’s damages in the rehab facility. Compute the US dollar cost Lyonya had to pay to cover Polina’s damages (https://www.xe.com/ ).
Background: Emily’s employer, Gilbert Group, want to expand their international portfolio. She relocates to Paris to help ease the transition.
Question: In this clip, we learn that the Gilbert Group is acquiring the French marketing company Savoir. What is the difference between an acquisition and a merger? Find clues from the clip that you wouldn’t witness in a merger.
Background: Gabriel is a chef at a Parisian restaurant that is going through financial issues. Gabriel decides to move to Normandy to open his own restaurant. His girlfriend’s family offers to loan him the funds to save the Parisian restaurant.
Question: If you were to open a restaurant such as Gabriel’s, what options would you have in terms of fundings? List them all.
Course Classification: Finance, Money and Banking, Macroeconomics
Concepts: debt financing, budget deficit
Background: Pili and Ioane’s grandfather is about to lose his house to creditors, as he failed to pay his bills. In this clip, Leilani (Pili and Ioane’s mother) discusses her father’s finances. She considers selling her apartment in New York to pay off her father’s debt.
Question: The grandfather is experiencing a budget deficit. Define this term and find other options to help the grandfather keep his house.
Course Classification: Finance, Money and Banking, Labor Economics
Concepts: debt financing, value of debt
Background: During a car ride, Ioane finds out Hana did not submit her application to the prestigious Juilliard School in New York.
Question: In this clip, we learn that Hana cannot afford college tuition, which encourages her to find the lost treasure. Research the most recent tuition fee for a year at the Juilliard School. Should Hana borrow money to pay tuition? Define the value of debt and explain.
