[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.37,0:00:06.100,Default,,0000,0000,0000,,[intense music]
Dialogue: 0,0:00:06.100,0:00:13.95,Default,,0000,0000,0000,,[music gets louder]
Dialogue: 0,0:00:13.95,0:00:16.31,Default,,0000,0000,0000,,Hey how you doing students, \Nthis is Mr. Clifford.
Dialogue: 0,0:00:16.31,0:00:20.58,Default,,0000,0000,0000,,Welcome to ECON movies. Today we're going\Nto look at the economics in Indiana Jones.
Dialogue: 0,0:00:20.58,0:00:26.55,Default,,0000,0000,0000,,[Indiana Jones theme song]
Dialogue: 0,0:00:26.55,0:00:30.26,Default,,0000,0000,0000,,As you know, Dr. Jones isn't an \Neconomist, he's an archaeologist.
Dialogue: 0,0:00:30.26,0:00:35.90,Default,,0000,0000,0000,,We do not follow maps to buried \Ntreasure and X never, ever marks the spot.
Dialogue: 0,0:00:35.90,0:00:39.04,Default,,0000,0000,0000,,Sounds pretty boring. Let's look at \None of the most important concepts
Dialogue: 0,0:00:39.04,0:00:45.81,Default,,0000,0000,0000,,in all of economics. Demand and supply.\NIt all starts with buyers and sellers.
Dialogue: 0,0:00:46.08,0:00:48.63,Default,,0000,0000,0000,,You bring me muachi.
Dialogue: 0,0:00:48.82,0:00:50.16,Default,,0000,0000,0000,,Here he is.
Dialogue: 0,0:00:53.87,0:00:56.70,Default,,0000,0000,0000,,This muachi's a real small guy.
Dialogue: 0,0:00:56.70,0:00:59.97,Default,,0000,0000,0000,,They come together to negotiate \Na price that works for both of them.
Dialogue: 0,0:01:02.81,0:01:05.19,Default,,0000,0000,0000,,The buyer wants to pay \Nthe lowest price possible,
Dialogue: 0,0:01:05.19,0:01:07.41,Default,,0000,0000,0000,,but the seller doesn't \Nhave to accept that offer.
Dialogue: 0,0:01:07.41,0:01:11.42,Default,,0000,0000,0000,,The diamond Lao, the deal \Nwas for the diamond.
Dialogue: 0,0:01:13.46,0:01:16.51,Default,,0000,0000,0000,,Now if the buyer really wants that \Nproduct, he's going to have to increase
Dialogue: 0,0:01:16.51,0:01:19.51,Default,,0000,0000,0000,,the price to something \Nthe seller is willing to take.
Dialogue: 0,0:01:29.30,0:01:31.27,Default,,0000,0000,0000,,Oh Lao!
Dialogue: 0,0:01:31.27,0:01:33.99,Default,,0000,0000,0000,,In this example, there's just \None buyer and one seller.
Dialogue: 0,0:01:33.99,0:01:36.27,Default,,0000,0000,0000,,When you start analyzing \Nmultiple buyers and sellers,
Dialogue: 0,0:01:36.27,0:01:38.09,Default,,0000,0000,0000,,then you're looking at markets.
Dialogue: 0,0:01:38.09,0:01:41.51,Default,,0000,0000,0000,,To understand markets, Indiana Jones \Nneeds to find somebody to teach him
Dialogue: 0,0:01:41.51,0:01:43.22,Default,,0000,0000,0000,,demand and supply.
Dialogue: 0,0:01:43.22,0:01:46.52,Default,,0000,0000,0000,,[suspenseful music]
Dialogue: 0,0:01:46.52,0:01:52.80,Default,,0000,0000,0000,,[professor teaching]
Dialogue: 0,0:01:52.80,0:01:56.90,Default,,0000,0000,0000,,[music intensifies]
Dialogue: 0,0:01:56.90,0:02:06.67,Default,,0000,0000,0000,,[professor getting louder]
Dialogue: 0,0:02:06.67,0:02:09.81,Default,,0000,0000,0000,,To learn about demand and supply,\Nlet's pick a market we can analyze.
Dialogue: 0,0:02:09.81,0:02:12.12,Default,,0000,0000,0000,,Let's pick something like pet snakes.
Dialogue: 0,0:02:12.12,0:02:16.04,Default,,0000,0000,0000,,Snakes. Why did it have to be snakes?
Dialogue: 0,0:02:16.04,0:02:19.87,Default,,0000,0000,0000,,Let's start with demand. To have \Ndemand, buyers must be willing and able
Dialogue: 0,0:02:19.87,0:02:24.50,Default,,0000,0000,0000,,to buy pet snakes. Now obviously some \Npeople like pet snakes and some don't.
Dialogue: 0,0:02:26.87,0:02:29.36,Default,,0000,0000,0000,,There's a big snake in the plane Jack!
Dialogue: 0,0:02:30.06,0:02:32.88,Default,,0000,0000,0000,,Oh that's just my pet snake Reggie.
Dialogue: 0,0:02:33.32,0:02:36.38,Default,,0000,0000,0000,,I hate snakes Jack. I hate them!
Dialogue: 0,0:02:36.38,0:02:39.64,Default,,0000,0000,0000,,When the price is really high, \Nlet's say $100 for a pet snake,
Dialogue: 0,0:02:39.64,0:02:41.69,Default,,0000,0000,0000,,people don't want to \Nbuy very many snakes.
Dialogue: 0,0:02:41.69,0:02:43.62,Default,,0000,0000,0000,,In this case, only 10 \Nwould be purchased.
Dialogue: 0,0:02:43.62,0:02:46.74,Default,,0000,0000,0000,,After all, there's a bunch of \Nsubstitute pets you could buy instead.
Dialogue: 0,0:02:46.74,0:02:49.77,Default,,0000,0000,0000,,You could buy a pet tarantula, \Na pet elephant, or a pet camel.
Dialogue: 0,0:02:49.77,0:02:51.26,Default,,0000,0000,0000,,(Indiana Jones)\NNo camels.
Dialogue: 0,0:02:51.26,0:02:53.04,Default,,0000,0000,0000,,Okay, okay no camels, no camels.
Dialogue: 0,0:02:53.04,0:02:55.57,Default,,0000,0000,0000,,If the price was lower for snakes, \Nconsumers would be willing and able
Dialogue: 0,0:02:55.57,0:02:56.90,Default,,0000,0000,0000,,to buy more snakes.
Dialogue: 0,0:02:56.90,0:03:00.71,Default,,0000,0000,0000,,In this case, if the price is down to 2, \Nthen consumers will want to buy 300.
Dialogue: 0,0:03:00.71,0:03:03.72,Default,,0000,0000,0000,,This downward sloping demand \Ncurve shows you the law of demand.
Dialogue: 0,0:03:03.72,0:03:06.84,Default,,0000,0000,0000,,The inverse relationship between \Nprice and quantity demanded.
Dialogue: 0,0:03:06.84,0:03:09.49,Default,,0000,0000,0000,,The supply curve on the other \Nhand is upward sloping.
Dialogue: 0,0:03:09.49,0:03:14.31,Default,,0000,0000,0000,,It takes time, energy, and money to \Nbreed, raise, and sell pet snakes.
Dialogue: 0,0:03:14.51,0:03:17.42,Default,,0000,0000,0000,,At a low price, sellers wouldn't \Nwant to sell very many snakes
Dialogue: 0,0:03:17.42,0:03:18.98,Default,,0000,0000,0000,,because it's not profitable.
Dialogue: 0,0:03:18.98,0:03:22.95,Default,,0000,0000,0000,,So at a low price of 2, the quantity\Nsupplied would only be 10 snakes.
Dialogue: 0,0:03:22.95,0:03:25.96,Default,,0000,0000,0000,,At a high price of $100, sellers \Nwould have more incentive
Dialogue: 0,0:03:25.96,0:03:27.82,Default,,0000,0000,0000,,to bring a bunch of \Nsnakes to the market.
Dialogue: 0,0:03:27.82,0:03:30.71,Default,,0000,0000,0000,,[upbeat music]
Dialogue: 0,0:03:30.71,0:03:34.43,Default,,0000,0000,0000,,Now we're finally there. It's time to \Nput demand and supply together.
Dialogue: 0,0:03:34.43,0:03:36.27,Default,,0000,0000,0000,,X marks the spot.
Dialogue: 0,0:03:36.27,0:03:37.47,Default,,0000,0000,0000,,Let's analyze this graph.
Dialogue: 0,0:03:37.47,0:03:39.68,Default,,0000,0000,0000,,At a low price of 2, \Nthe quantity demanded,
Dialogue: 0,0:03:39.68,0:03:43.53,Default,,0000,0000,0000,,the amount buyers want to buy, will be\Na lot higher than the quantity supplied.
Dialogue: 0,0:03:43.53,0:03:48.06,Default,,0000,0000,0000,,At that price, buyers want to buy 300,\Nbut sellers would only want to sell 10.
Dialogue: 0,0:03:48.06,0:03:51.49,Default,,0000,0000,0000,,This is called a shortage. \NIf the price is up here at 100,
Dialogue: 0,0:03:51.49,0:03:53.72,Default,,0000,0000,0000,,then sellers would want \Nto sell a bunch of snakes,
Dialogue: 0,0:03:53.72,0:03:55.88,Default,,0000,0000,0000,,but the buyers would only \Nwant to buy a few of them.
Dialogue: 0,0:03:55.88,0:03:57.68,Default,,0000,0000,0000,,This is called a surplus.
Dialogue: 0,0:03:57.68,0:04:00.45,Default,,0000,0000,0000,,At $20, the quantity demanded \Nequals the quantity supplied,
Dialogue: 0,0:04:00.45,0:04:04.26,Default,,0000,0000,0000,,so there's no shortage and there's \Nno surplus. This is called equilibrium.
Dialogue: 0,0:04:04.26,0:04:06.88,Default,,0000,0000,0000,,Equilibrium is like the Holy \NGrail of supply and demand.
Dialogue: 0,0:04:06.88,0:04:09.12,Default,,0000,0000,0000,,That's the cup of a carpenter.
Dialogue: 0,0:04:10.89,0:04:13.58,Default,,0000,0000,0000,,Now you understand the graph and\Nequilibrium, but we're not done.
Dialogue: 0,0:04:13.58,0:04:16.51,Default,,0000,0000,0000,,The supply and demand graph \Nis a great tool for figuring out
Dialogue: 0,0:04:16.51,0:04:18.96,Default,,0000,0000,0000,,what's going to happen when \Nthere's a change in a market.
Dialogue: 0,0:04:18.96,0:04:22.60,Default,,0000,0000,0000,,For example, let's say that snakes \Nand monkeys are substitute pets.
Dialogue: 0,0:04:22.60,0:04:24.60,Default,,0000,0000,0000,,(young boy)\NWhere did this animal come from?
Dialogue: 0,0:04:24.60,0:04:28.12,Default,,0000,0000,0000,,[children laughing]
Dialogue: 0,0:04:28.12,0:04:29.52,Default,,0000,0000,0000,,(girl)\NOh no.
Dialogue: 0,0:04:29.52,0:04:32.02,Default,,0000,0000,0000,,[girl laughing nervously]
Dialogue: 0,0:04:32.02,0:04:35.12,Default,,0000,0000,0000,,Now assume that the price \Nof pet monkeys falls.
Dialogue: 0,0:04:35.12,0:04:38.40,Default,,0000,0000,0000,,How will this affect the price \Nand quantity of pet snakes?
Dialogue: 0,0:04:38.40,0:04:41.38,Default,,0000,0000,0000,,It doesn't affect the supply \Ncurve for pet snakes at all.
Dialogue: 0,0:04:41.38,0:04:42.92,Default,,0000,0000,0000,,It affects the demand.
Dialogue: 0,0:04:42.92,0:04:45.60,Default,,0000,0000,0000,,Consumers that would normally buy \Npet snakes would now turn around
Dialogue: 0,0:04:45.60,0:04:48.71,Default,,0000,0000,0000,,and go buy more pet monkeys \Nbecause their price is cheaper.
Dialogue: 0,0:04:48.71,0:04:50.85,Default,,0000,0000,0000,,This would decrease the \Ndemand for pet snakes,
Dialogue: 0,0:04:50.85,0:04:53.56,Default,,0000,0000,0000,,shifting the demand curve to the left.
Dialogue: 0,0:04:53.56,0:04:56.21,Default,,0000,0000,0000,,At every possible price, people \Nare buying less pet snakes
Dialogue: 0,0:04:56.21,0:04:58.15,Default,,0000,0000,0000,,because they're buying monkeys instead.
Dialogue: 0,0:04:58.15,0:05:00.88,Default,,0000,0000,0000,,The graph shows the new equilibrium \Nand the fact that the price
Dialogue: 0,0:05:00.88,0:05:05.28,Default,,0000,0000,0000,,and quantity will fall. Wait, why? \NWhy does the price go down?
Dialogue: 0,0:05:05.28,0:05:08.93,Default,,0000,0000,0000,,After the demand curve shifted left,\Nwhat would happen if sellers
Dialogue: 0,0:05:08.93,0:05:12.80,Default,,0000,0000,0000,,kept trying to sell snakes at \Nthe old equilibrium of $20?
Dialogue: 0,0:05:12.80,0:05:15.68,Default,,0000,0000,0000,,There would be a surplus. There'd be \Nway more snakes out in the market
Dialogue: 0,0:05:15.68,0:05:17.01,Default,,0000,0000,0000,,than consumers want to buy.
Dialogue: 0,0:05:17.01,0:05:19.29,Default,,0000,0000,0000,,[intense music]
Dialogue: 0,0:05:19.29,0:05:21.84,Default,,0000,0000,0000,,[man screaming]
Dialogue: 0,0:05:21.84,0:05:24.11,Default,,0000,0000,0000,,Sellers would compete with each \Nother because they want to get rid
Dialogue: 0,0:05:24.11,0:05:26.71,Default,,0000,0000,0000,,of all these excess snakes which \Nwould drive the price down
Dialogue: 0,0:05:26.71,0:05:28.91,Default,,0000,0000,0000,,to the new equilibrium.\NDid you get that?
Dialogue: 0,0:05:28.91,0:05:31.49,Default,,0000,0000,0000,,Let's show a change again except \Nthis time assume the people
Dialogue: 0,0:05:31.49,0:05:33.56,Default,,0000,0000,0000,,in this market have a \Npest control problem.
Dialogue: 0,0:05:33.56,0:05:35.03,Default,,0000,0000,0000,,(Indiana Jones)\NOh rats.
Dialogue: 0,0:05:35.03,0:05:39.91,Default,,0000,0000,0000,,[intense violin music]
Dialogue: 0,0:05:39.91,0:05:42.37,Default,,0000,0000,0000,,When people go to the pet store, \Nthey figure let's get a pet
Dialogue: 0,0:05:42.37,0:05:44.01,Default,,0000,0000,0000,,that can help us get rid of rats.
Dialogue: 0,0:05:44.01,0:05:46.72,Default,,0000,0000,0000,,What'll happen to the \Ndemand for pet snakes?
Dialogue: 0,0:05:46.72,0:05:49.19,Default,,0000,0000,0000,,If you said increase or shift right,
Dialogue: 0,0:05:49.19,0:05:52.19,Default,,0000,0000,0000,,you have chosen wisely.
Dialogue: 0,0:05:52.19,0:05:55.77,Default,,0000,0000,0000,,The graph shows the new equilibrium \Nand says the price and the quantity
Dialogue: 0,0:05:55.77,0:05:57.04,Default,,0000,0000,0000,,will both go up.
Dialogue: 0,0:05:57.04,0:05:59.85,Default,,0000,0000,0000,,Why does the price go up? After the \Ndemand curve shifted to the right,
Dialogue: 0,0:05:59.85,0:06:03.67,Default,,0000,0000,0000,,now the quantity demanded is way \Ngreater than the quantity supplied.
Dialogue: 0,0:06:03.67,0:06:06.47,Default,,0000,0000,0000,,This is a shortage. Consumers \Nwant more pet snakes
Dialogue: 0,0:06:06.47,0:06:10.60,Default,,0000,0000,0000,,so they can eat the rats, but the sellers\Nare running out of snakes to sell.
Dialogue: 0,0:06:10.60,0:06:13.30,Default,,0000,0000,0000,,Competition between buyers \Nwould bid up the price of snakes
Dialogue: 0,0:06:13.30,0:06:16.47,Default,,0000,0000,0000,,and give sellers more of an incentive \Nto bring more on the market.
Dialogue: 0,0:06:16.47,0:06:18.82,Default,,0000,0000,0000,,Price would go up, quantity would go up.
Dialogue: 0,0:06:18.82,0:06:20.82,Default,,0000,0000,0000,,Understanding these markets \Nis actually pretty easy
Dialogue: 0,0:06:20.82,0:06:23.56,Default,,0000,0000,0000,,because it's just the collective \Nbehavior of buyers and sellers.
Dialogue: 0,0:06:23.56,0:06:26.59,Default,,0000,0000,0000,,In the end, I don't think Indiana Jones \Nwould want to buy a pet snake
Dialogue: 0,0:06:26.59,0:06:27.85,Default,,0000,0000,0000,,or a pet monkey.
Dialogue: 0,0:06:27.85,0:06:29.78,Default,,0000,0000,0000,,I think he'd prefer a dog.
Dialogue: 0,0:06:29.78,0:06:31.95,Default,,0000,0000,0000,,We named the dog Indiana.
Dialogue: 0,0:06:31.95,0:06:33.28,Default,,0000,0000,0000,,Dog?
Dialogue: 0,0:06:33.28,0:06:35.73,Default,,0000,0000,0000,,(laughter)\NYou are named after the dog?
Dialogue: 0,0:06:35.73,0:06:38.56,Default,,0000,0000,0000,,[laughter]
Dialogue: 0,0:06:38.56,0:06:41.56,Default,,0000,0000,0000,,Got a lot of fond memories of that dog.
Dialogue: 0,0:06:43.99,0:06:54.33,Default,,0000,0000,0000,,[Indiana Jones theme song]
Dialogue: 0,0:06:54.33,0:07:00.43,Default,,0000,0000,0000,,[upbeat music]