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The Hudsucker Proxy: Using Media to Teach Economics

by G. Dirk Mateer , Penn State University
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Summary

This film chronicles the introduction of the hula hoop, a toy that set off one of the greatest fads in United States history. According to Wham-O, the manufacturer of the hoop, when the toy was first introduced in the late 1950s, over 25 million were sold in four months. This short scene illustrates the difference between a movement along a demand curve and a shift of the entire curve, a subtle point that many students struggle with.

Learning Goals


The power of this scene is that we are reminded that changes in price cannot shift the demand curve. Shifts in demand can only happen when something other than price changes.

Context for Use


One of the hardest concepts to get across in a principles of economics class are changes in demand versus changes in quantity demanded. This short scene from The Hudsucker Proxy provides a vivid example that will help students recall the difference in a humorous way.

Here is a plot synopsis. The Hudsucker Corporation has decided to sell the hula hoop for $1.79. We see the toy store owner leaning next to the front door waiting for customers to enter but customers are non-existent. Next, the movie cuts to the president of the company, played by Tim Robbins, and we see him sitting behind a big desk waiting to hear how the launch of the hula hoop is going. It does not go well. The price starts to drop, first to $1.59, then $1.49 and so on down until the hula hoop is "free with any purchase." Even this is not enough to attract consumers. So the toy store owner throws the hula hoops out into the alley behind the store.

At his point, it is a fluke that changes the direction of the entire movie. When the hula hoops are tossed into the alley one of them rolls across the street and around the block before landing at the foot of a boy who is skipping school. He picks up the hula hoop and tries it out. He is a natural. About this time school lets out and a throng of students rounds the corner and sees him playing with the hula hoop. Suddenly everyone wants a hula hoop and there is a run on the toy store. Preferences have changed, and demand has increased. The hula hoop craze is born and we account for this by shifting the entire demand curve to the right. The toy store responds by ordering new hula hoops and raising the price to $3.99, which happens to be the new market price after the increase, or shift, in demand.

Description and Teaching Materials


The instructor should secure a copy of The Hudsucker Proxy on DVD and show chapter 25.

Teaching Notes and Tips


After defining the law of demand and explaining the difference between a movement along a demand curve and a change in demand show the scene from The Hudsucker Proxy. The scene lasts 3 minutes. After watching the scene draw the original demand curve (before the hula hoop craze starts) then ask your students to illustrate what happens to demand once the hula hoop craze is in full swing.

Assessment


Be sure to provide additional practice problems either on homework assignments, quizzes, or in-class activities to reinforce this concept.

References and Resources


Here is a helpful PowerPoint slide that illustrates what happens in the movie scene: The Hudsucker Proxy PowerPoint (PowerPoint 102kB Feb13 10)

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