Author: Jadrian Wooten

Economics eductor. Follow me @Wootenomics

Categories
Health Labor Principles

Looking for a Doctor

It’s time for Cheyenne to deliver her baby, but there are no doctor in the store. Even though Sandra is a trained midwife, the other employees ignore her in exchange for a pharmacist, an employee who has delivered a calf, and another employee who has played a doctor in a theatre show. Each of the substitutes don’t have the actual training to deliver a baby, and the skills they possess likely don’t transfer to skill needed to deliver a baby. Only Sandra is actually qualified, but she doesn’t speak up.

Categories
Labor Principles

Glenn Works Two Jobs

Glenn hasn’t been able to find a replacement for his assistant manager, so he takes on the both roles for the day. Glenn struggles to get everything done in one day and suggests that he may have to stop sleeping. Even though he’s doubled his effort, his output hasn’t doubled; it has diminished. At a certain point in the production function, additional workers are not as productive as the ones before them. For Glenn, this would be represented by the additional hours that he’s worked in the day. Specialization allows workers to focus their time on tasks that they are good at, like setting schedules or ordering products. Just because a worker can do all of the functions, doesn’t mean they should do them all.

Categories
Principles

Dina Doesn’t Know Makeup

Dina has stepped down as the assistant manager and is spending the day at the makeup counter with Cheyenne. When Cheyenne tries to make a joke about being the boss, Dina reverts to her naturally authoritative tendency. Given Dina’s background, her comparative advantage is in authoritative roles and we come to see that see is ill-suited to work in cosmetics. She will eventually return to her management role.

Categories
Labor

Amy Weighs a Promotion

After Dina stepped down as assistant manager, the store manager needs to find her replacement. Amy knows she is the likely candidate but declines the offer before Glenn can offer her the position. Her rationale conforms to the income-leisure tradeoff model. Since there is no increase in earnings from the assistant manager position, Amy doesn’t want to spend more of her time away from leisure. The scarcity of time available in her day means she must make tradeoffs on how to spend her time and she would rather spend it on her college classes.

Categories
Consumer Choice & Behavioral Principles

A Demotion for Love

Dina has had a crush on Jonah for a while, but Jonah was always able to avoid the situation because he said he wasn’t comfortable dating a supervisor. He shares this news with his friend, shortly before the store manager announces that Dina has decided to step down as assistant manager so that she can focus on personal matters. Either-or decisions of this matter require people to weigh the costs and benefits of actions. Some of the costs for Dina include not being able to criticize Glenn, a reduction of her authority, and likely a pay reduction. She must believe that the benefits of dating Jonah outweigh those costs.

Categories
Market Structures Principles

Discount for Damaged Goods

Cloud 9 won’t sell products that have been damaged, which seems like a good policy. Unfortunately, this means that if an employee wanted to take something, they just have to accidentally damage it. Glenn is frustrated with Cloud 9 and destroys some of the alcohol by marking the bottles with a marker. He declares it party time, sponsored by his family’s old store (Sturgis and Sons) which had been driven out of business when Cloud 9 entered the market.

Categories
Market Structures Unemployment

Cloud 9 vs. Sturgis & Sons

Glenn’s family used to own a local hardware store before Cloud 9 entered the market and put them out of business. Cloud 9 was probably able to take advantage of economies of scale and a large distribution network to offer competing products at lower prices. Monopolistic competition in the long run results in zero profits for firms, but if a small company already has relatively little profit before entry, a decrease in demand could result in that particular firm incurring losses and leaving the market. Because Sturgis and Sons specialized in hardware, some of those workers may be structurally unemployed if their skills are no longer needed in the local market. Later in the episode, Glenn finally shares his frustration with Cloud 9 and how they killed his family’s business because of their devotion to profit maximization.

Categories
Labor

College as an Adult

The employees are locked in the store after hours while hanging up signs, but Amy laments that she has more important things to do: she has a midterm to study for. Trying to be relatable, Jonah reminisces about his time in college: getting drunk and having philosophical debates. It begs the question of how much human capital accumulation actually occurs and provides some support for the signaling model. Amy is treating college like an investment, so she resents Jonah’s downplaying of its importance.

Categories
Consumer Choice & Behavioral Principles Supply & Demand

Consumption vs. Savings

Bo and Cheyenne are shopping for wedding supplies in the store. Bo really wants to buy some laptops so they can smash them during the wedding as a form of entertainment. Amy is shocked because she knows how expensive it is to raise a child and believes that the couple should be saving the money instead of spending it on one day. Amy tricks Bo into playing a game with a price gun so that Bo and Cheyenne can see how expensive a child can be. People struggle to recognize the opportunity costs in their decisions, but Amy has made the cost more salient.

Categories
Supply & Demand

Wedding Sale Rush

The store is having a one-day wedding sale and the discounts are steep enough that there is a line of women ready to purchase products. The increased purchases represent a change in the quantity demanded for items from the store. Since they didn’t stock enough items, the low prices will result in a shortage and likely an inefficient allocation among the shoppers.