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Leslie asks a city councilor to not cut the Parks budget 8% and to find the money somewhere else. The counselor decides to propose shutting down the local animal shelter in exchange. Because funding is scarce in the local government, the city councilors have to cut funding in one area to save another department.
See more: budgets, federal budget, government spending, opportunity costs, rationing, scarcity, tradeoffs, unintended consequences
The citizens of Pawnee drink from a water fountain by placing their whole mouth on the nozzle. Ann correctly points out the externality in the situation that by kissing one water fountain drinker, you’re kissing them all.
See more: common resources, externalities, negative externalities, private benefits, social costs
Ben and Leslie are trying to outsmart the new Newport campaign manager, but they aren’t sure if she’s giving them good advice or purposely bad advice. Having complete information means that everyone knows that everyone knows, but Ben and Leslie are feeling a bit lost.
See more: behavioral, full information, game theory, optimal behavior, second mover advantage
Andy hits his head against the wall, but can’t afford to go see a doctor. He hasn’t had insurance for two years because he thinks he only needs it for when something bad happens. Moral hazards often arise when one party takes on more risk because they are insured.
See more: adverse selection, asymmetric information, health economics,insurance, moral hazard, public health
While on suspension, Leslie buys her officemates Christmas gifts based on their personalities. Ron mentions how he only gives people $20, but realizes how great Leslie’s gifts are and how the office needs to remedy the gift giving imbalance. While Ron takes the most efficient outcome for gift giving, he’s realizing that there may need to be a bit more thought put into the process.
See more: behavioral, equity, gift giving, preferences, utility
The city is finally removing an old payphone and has decided to complete Indiana’s tiniest park. Leslie believes this investment will attract 5000 visitors to the city who would want to see the “Smallest Park in Indiana.”’
See more: common resources, government spending, growth, investment, technology
Leslie and Ben are holding a town forum for Indiana’s Smallest Park, but a town citizen brings up that she’s concerned about whether basketball will be played at this park because it brings undesirables to the park. Leslie then demonstrates all the possible problems that could come from this park, including grilling and fireworks.
See more: club goods, common resources, externalities, public goods, types of goods
Andy has decided to take a class at the local community college and April is helping him look through the catalog. Ron encourages him to take a course in a new subject and broaden his horizons, but April thinks he should take an easy class to get an A.
See more: education, effort minimization, human capital, incentives, labor, signalling, skill building
Andy is ready to register for his first college course, but is shocked by the cost of one class. He then decides to pick up a second job before Ron offers to pay for his class.
See more: cost of college, education, human capital
The Reasonablists are having their end-of-life party in the local park and Ron sees an opportunity to sell his high quality wooden flutes. Because the party springs up without notice, Ron sees a sudden spike in demand for his flutes. The leader of the Reasonabilists offers Ron a check because they don’t believe it will have any value the next day, but Ron has been selling them flutes for each of their previous going away parties.
See more: demand, demand shifts, elasticity, expectations, inelastic, M2, markets, medium of exchange, money, normal goods, preferences, store of value, transactions, unit of account
Economics of Parks & Recreation 