As the prices of real estate in Pawnee rises, it induces the Newport family to sell some of the land that they own. This clip can be used to illustrate the law of supply and the role if incentives.
See more: incentives, reservation price, supply, supply shifts
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
It’s time for some shop talk as Leslie and Ben sit down with Ben’s campaign manager to discuss their strategy going forward in Ben’s election. Leslie takes a brief moment to note that shop talk is one of her favorite types of talk and then goes on to list the other types. This is a cute (and quick) introduction to the concept of product differentiation, where companies sell similar products with different attributes. Product differentiation can allow a company to charge higher prices for their products if people perceive value in the differentiation.
See more: preferences, product differentiation, subjective value
The Parks Department is holding a garage sale to help raise funds for Jerry’s medical bills. The scene starts with April and Andy trying to decide the appropriate price for a hat that has sentimental value for Andy. Later, Tom tries selling a coat he had paid $150 dollars for. Tom marks the coat up to $200 because he put a scorpion on the back of it, but the customer doesn’t seem to think that’s an appropriate price for this venue.
See more: costs, inputs Prices, prices, subjective value, value, value added, willingness to buy, willingness to sell
Every time Ann starts dating someone new, her preferences shift and she starts buying items that match the preferences of her partner. For Chris, she started buying a lot of workout equipment, for Andy it was a grunge phase, and for Tom it was purchasing a lot of unnecessary items. The demand for various items in a market can shift when consumer preferences change, and for Ann that occurs when she has a new boyfriend.
See more: demand, demand shifts, preferences, utility
Tom needs help learning about basketball so that he can connect with the customers at his store. He believes Ben and Andy can help him since they’re good with numbers and athletic (respectively), but he tricks them into coming into his office by telling them that their favorite items are there. For Ben, he claims that Michael Stipe is in the office, but all he needs to do is offer Andy some free Skittles, respectively to incentivize him.
See more: incentives, Principles, self-interest
Andy and April break into City Hall to get Leslie and Ben’s marriage license, but April decides she may want to take the entire stack of marriage applications for everyone in Pawnee. April doesn’t want anyone else to get married because it makes it less special for her and Andy.
See more: diminishing returns, positional good
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
Economics of Parks & Recreation 