Donna and Tom are curious about what the newest fad is in Pawnee. Annabel Porter tells Ron, Donna, and Tom about milk with a flourish that makes it worth $60 a gallon instead of $3 a gallon. Ron isn’t fooled, he realizes it’s just milk.
See more: advertising, demand shifts, monopolistic competition, preferences, product differentiation
Gryzzl wants to bring in a celebrity to help distinguish the company so that they can win the bid. Tom and Donna list other instances where celebrity ownership or endorsement have helped companies. Celebrity endorsements may serve as a signalling device for companies.
See more: advertising, celebrity endorsement, monopolistic competition, product differentiation, signalling
Leslie is hoping to obtain a piece of land for free so she can turn it into a park. Ron taunts Leslie about her $0 bid for the land because typically people expect money in exchange for goods and services. This can be a good illustration of the medium of exchange function of money, but can also lead to a deeper discussion of externalities.
See more: capitalism, exchange, medium of exchange, money, transactions
Leslie is upset after a recent speech she gave in London, but Ron is there to help. Ron invites Leslie outside for a pep talk so she can get some fresh air. As a staunch libertarian, Ron isn’t too fond of the foul stench of European Socialism. Ron is not a big fan of his trip to London and has trouble adjusting to the differences between the two countries.
See more: comparative systems, Europe, libertarianism, market based economies, socialism
The Parks Department is trying to determine where to eat and Donna suggests sushi. Andy initially declines because he claims that he is allergic, but it turns out he just thinks he’s allergic. Every time he eats 80 pieces of sushi he gets sick. He probably isn’t allergic, but instead is experiencing decreasing returns (negative marginal returns).
See more: decreasing utility, diminishing returns, negative utility, utility
Ben and Leslie need rings for their wedding, but can’t seem to find acceptable ones around town. Ron offers to make the rings for them and describe how easy the process was for him, despite not being all that easy at all. Ron believes that people who buy things are suckers.
See more: comparative advantage, gains from trade, markets, mutually beneficial transactions, specialization, trade
Leslie is trying to prepare for the correspondents’ lunch by testing her jokes on the Parks Department. While most of her jokes revolve around a local newspaper that has picked on Leslie in the past, she decides to ask her colleagues if they have any jokes she can use Ron decides to tell the gang a joke about efficient governments, but Leslie doesn’t find it all that funny.
See more: government intervention, government spending, inefficiencies, mandatory transactions, mutually beneficial transactions, rent seeking, role of government, tax revenue, taxes
Ron thinks he’s won a free steak from a local steakhouse, but instead he’s been served papers. While he isn’t actually getting that steak, he should have been weary about the opportunity of a free item.
See more: free lunch, NSTAFL
Ron owes a large settlement, but keeps his money stored in the form of gold and palladium. While the rest of the office thinks this is a really neat idea, they question whether he knows how much money he actually has since it’s not stored in paper money. Ron is confident in the weight of his money, but not its value.
See more: commodity money, fiat money, medium of exchange, monetary policy, money, store of value, unit of account
Ron and Chris disagree with the best way to motivate workers. While Chris takes a more intrinsic approach, Ron focuses on base level needs of fear and hunger, but also on money. Ron’s extrinsic approach comes from his belief in markets being able to serve as a motivator. Both agree that motivating workers can increase productivity, but disagree on the best method of doing so.
See more: incentives, labor, motivation, pay and productivity, productivity, self-interest
Economics of Parks & Recreation 