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
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
Economics of Parks & Recreation 