Glenn and Jerusha want to have another child, but they need to find a surrogate. Cheyenne mistaken agrees to do it and tries to back out, but her boyfriend is supportive of the decision after learning that they’ll earn $20,000. He decides to spend that money (which he calls infinite money) on a new hot tub. The increase in their income results in an increase in their demand for normal goods. In this case, the hot tub is likely income-elastic.
Glenn has found a potential surrogate online, but it seems more like he may be interviewing a kidnapper. While he believes he’s interviewing a potential surrogate, he goes through the process of identifying her reservation wage. A reservation wage is the lowest amount that a worker is willing to accept. He mentions that he and his wife only have $20,000, which the surrogate agrees to. He then lowers it to $15,000 and she still is willing to accept it. When he tries to go down to $10,000 she notes that it’s too low. Because Glenn is willing to pay $20,000 for a surrogate, any price below that will result in consumer surplus for his family.
Cloud 9 has a policy of giving employees $1 for every Blue Card Rewards customer they sign up. Glen tried to email the customer list to apologize for a viral video filmed in the store, but a lot of the email addresses came back as undeliverable. Glenn questions Mateo about possibly signing up fake customers to get the $1 incentive, but Mateo denies that he would do something like this.
Jerusha and Glenn are over for a party that Amy is hosting and Jerusha takes the time to console Amy on her recent divorce. Jerusha actually points out the sunk cost fallacy and praises Amy for her divorce since it’s better than staying in a marriage that doesn’t make you happy. A classic sunk cost fallacy example is often relationships where one party is unwilling to break up the relationship because of the amount of time they have spent together.
Mateo has an ear infection and can’t afford to see a doctor because of their high deductible health plan. Since this is common in the store, Amy sets up a fake charity to help raise funds for Mateo to pay for a doctor’s visit. Jonah thinks this is preposterous and tries to setup a savings club that employees can use when they need it. After realizing how many pre-existing conditions his coworkers have, they realize that the $20 membership fee isn’t enough to cover all of their issues. These scenes serve as a good example of adverse selection since the sickest employees are more likely to sign up for the program since their healthcare costs outweigh the membership fee.
After coming down with an ear infection, Mateo reaches out to the pharmacist to see if he can get some medicine to help. He doesn’t have enough money to get a prescription, so he’s hoping he can bypass that system and go directly to the pharmacist. Tate subtly emphasizes that pills get miscounted all the time, implying that he can sell Mateo some drugs in exchange for cash. Black market transactions are hard to track, but they still represent an economic transaction where one person has something that another covets.
Mateo came down with an ear infection and his coworkers helped raise funds from store customers. He was secretly able to get some antibiotics so the money that was raised doesn’t need to go to a doctor’s visit. Instead, he considers spending the money on a messenger bag instead of healthcare.
In the previous season, a massive tornado destroyed Cloud 9. Earlier in the episode, the employees held a memorial for a coworker (Brett) who they believed passed away during the tornado. Dina, normally the most confident worker, is a bit freaked out by a rainstorm outside and suggests that they head to the storm shelter. Her risk tolerance seems to have shifted to becoming rather risk averse following the tornado strike. Preferences for risk can change and be context dependent. In this case, a traumatic event a few months earlier has made a large impact on Dina’s tolerance for risk.
Glenn needs to fire 6 employees before the end of the day, and he decides to let the employees vote who they want to see terminated. Their voting method appears to be based on a majority rules system.
Glenn has been asked to fire 6 people before the end of the day, but he’s having trouble deciding which workers will be terminated. Amy decides to help him by having Glenn rank employees to narrow down the list. While evaluating employees, Glenn notes that Sarah is preferred to Elias. He’s trying to convert his subjective preferences into a ranking system.
Teaching with Superstore