Economics eductor. Follow me @Wootenomics
Ron describes a gentleman’s agreement he made with a man to build a dining table in exchange for a 60 feet of copper pipe and a half pig. The barter system is inefficient because of how hard it is to properly measure the trades.
See more: barter system, gains from trade, medium of exchange, store of value, transactions
A young student needs to interview someone for a school project and stumbles upon Ron in the office. Her project is supposed to focus on the role of government in society, which gives Ron the opportunity to share his libertarian views about the government’s purpose. After describing these views, the young student’s parent comes back very unhappy.
See more: efficiency, equity, fairness, role of government, taxes
Ron won’t endorse a product unless he uses it exclusively and actually believe in it. Firms in imperfect markets often use celebrity advertising because it serves as a signal that the person selling the product actually believes in the product.
See more: advertising, monopolistic competition, product differentiation
Leslie lists the most important things in life: friends, waffles, and work. She has trouble ranking friends and waffles, but she knows work is third. Transitivity is an important component of utility maximization.
See more: preferences, transitivity, utility
Ron has carefully hidden his birthday information from his friends, but Leslie uncovers the date when Ron decided to get a free scoop of rum raisin ice cream on his birthday from Baskin Robbins. While he didn’t realize it at the time, his free scoop of ice cream eventually cost him an important piece of personal information he was trying to hide.
See more: free lunch, NSTAFL, opportunity costs
Ron isn’t happy with the steak he was served, so instead he asks the waiter to give him all the bacon and eggs they have. While a bit extreme, his preferences and utility function should be respected in society despite the potential for future health issues.
See more: intrinsic value, moral hazard, obesity, preferences, subjective value, utility
Ron teaches his young basketball players that capitalism is God’s way of determining who is smart and who is poor. In the long run of a perfectly competitive market, the worst performers should be pushed out of the market.
See more: capitalism, comparative systems, globalization, government programs, government spending, inequality, normative statements, taxes
Bobby Newport would rather play Wii bowling because the guy looks like him instead of playing on his actual bowling lane right next to his Wii. While this is an uncommon view, his preferences ought to be respected since he’s trying to maximize his utility function.
See more: preferences, substitutes, utility, utility maximization
The Newport campaign manager discusses how she’s smarter and faster than Leslie’s campaign team. She does a great job of showing the different between a normative statement and a positive statement “that is not a judgement, that is a fact.”
See more: normative statements, positive statements
Ben and Leslie propose a solution to solving the budget crises, but accidentally suggest that all D1 employees (low-level) should be terminated. Because there is a limited amount of funds available in the city budget, any money moving to one department must come at the expense of another department.
See more: federal budget, government spending, opportunity costs, rationing, scarcity, tradeoffs, unintended consequences
Economics of Parks & Recreation 