Dr. Jamm bought a cooktop table from Benihana for $4,000 and thinks it is worth every penny. While Leslie and Chris may not place the same value on the table, Jamm’s subjective value is at least $4000.
Local restaurants are now offering giant sodas, filled with sugar. The child-sized soda is actually the size of a small child! Leslie proposes a soda tax to cut back on citizen’s consuming the sugary beverages, but a representative of the Pawnee Restaurant Association warns Leslie against doing so. Because this will limit the number of sodas being sold, restaurants may have to layoff up to 100 workers and Leslie will be the one to blame.
Leslie is accused of stripping people’s personal freedoms, but there are significant benefits to the community. According to Leslie, obesity is down, test scores are up, and raccoon attacks have decreased, but some citizens aren’t happy with the changes. When determining the appropriate level of government regulation, the costs and benefits of each action need to be considered, which is easier said than done.
Members of the Parks Department goes to London to visit, but Leslie can’t decide which bus tour to take. She has three options, all starting around the same time and needs to pick one. Ron and April aren’t much help. Because time is a scarce resource, Leslie needs to figure out which bus tour will maximize her happiness.
Tom incentives the department to come to his club and try his newest drink by threatening to place them on his “done-zo” list. The Parks Department decides to go to the Snake Hole Lounge to try Tom’s new drink, but instead they all have a bit too much and go through the next day feeling terrible. One of the other issues shown in this video is diminishing marginal utility. As the night goes on, each member of the group gets a bit happier, but they eventually peak and see negative returns the next morning.
See more: decreasing utility, diminishing returns, externalities, health economics, negative externalities, negative utility, private benefits, private costs, social benefits, social costs, unintended consequences, utility maximization
Neighboring city, Eagleton, has decided to build a fence around a small park they used to share with the citizens of Pawnee. Throughout the episode, we learn of various quality-of-life factors that Eagleton excels in relative to Pawnee. Things like obesity, height, income, wealth, and life expectancy are all much higher than in Pawnee, and the citizens of Eagleton want to keep it that way.
Tom wants to look good, and smell good, for Jessica Newport so he decides to sit for a few minutes in his “cologne cloud.” The smell is so overpowering though that Leslie needs to exit the car immediately. While Tom feels be benefits are worth the smell, Leslie isn’t a fan of the external effects.
The Pawnee Video Dome is failing and going out of business. Leslie is trying to find tax breaks to keep him afloat, but Ron says the market is signaling that the company is not providing enough value to consumers and deserves to fail. If companies provide a social good (like intellectual conversations) then governments may step in and subsidize the production of the service.
Leslie goes on Pawnee Today to talk about the City Council’s approval ratings. Joan Callamezzo is not at her best and describes the situation as a fact when it’s really her opinion. This is a good opening segue to discussing normative vs positive statements.