Noel Cowards

Media Type: TV Clips Topic: Incentives

King of Queens

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The scene makes a number of interesting teaching points. First, Arthur buys Doug and Carrie a very small car for Christmas.  Richie suggests that they leave the car under the overpass so it will get stolen and they can collect the insurance money -- this is an example of moral hazard. Second, Arthur's gift is an example of the deadweight loss of gift giving -- Arthur paid way more for the car than the value Doug and Carrie place on it. Third, Doug and Carrie don't have the car they want because they want to save up for their kids education -- this is an example of trade-offs.

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