Andy goes to the hospital for a broken nose, but it turns into a rant session for Ben. It turns out the roommate situation between Ben, April, and Andy hasn’t been ideal because Andy and April continue to use his things without his permission. Andy and Ben negotiate for ways to remedy the externality on their own. If property rights are well established (Ben does own his stuff!) then two parties can work out externalities without government intervention.
See more: bargaining, Coase Theorem, common resources, externalities, negative externalities, private costs, private goods, public goods, social benefits, social costs, transaction costs, types of goods
Pawnee is going through a budget crisis so Leslie and Ron propose a list of budget cuts that they believe will help keep the Parks Department operation. Chris and Ben break the news that the city’s budget is worse than imagined and the government will need to shut down despite their efforts to keep it operating.
See more: bargaining, government shutdown, government spending, tradeoffs
A soccer field is double-booked by the Parks Department and Leslie has to work out a solution for who gets the field. Because the field is rivalrous, both can’t use the field at the same time. One team’s use implies that the other cannot use the field.
See more: bargaining, common resources, resource allocation, rivalry, scarcity, tradeoffs