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.
Tag: luxury goods
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.
Unnecessary Bean Hopper
In order to win the Color Wars, teams have to sell as much as they can. Jonah doesn’t feel comfortable with the premise of this competition, even when the customers explicitly state that money isn’t a consideration in their purchase decisions. The coffee maker with the built-in bean hopper isn’t really necessary (which Jonah points out), but the customer is displaying some conspicuous consumption behavior.
Talked Into Buying a Grill
Jonah convinces Adam (Amy’s husband) to buy a new grill even though the couple doesn’t really need it. Earlier in the episode, Amy convinced Jonah to start selling stuff to people even if they don’t need it so they can win the store’s Color Wars. Adam and Amy don’t really have the savings to afford such a lavish purchase, but Jonah emphasizes how great the grill would be for Adam’s YouTube channel.
Get the Better Bike
Garret is in the process of convincing a customer to purchase a more expensive bike, the Vilano Forza, but the customer wants the cheaper RX-5 bike. Price isn’t the only determinant of a consumer’s utility function and Garret tries to convince the customer that the other features of the bike are worth the price. To end the scene, Garret also tries to get the customer to buy a bicycle helmet, which is a good example of a complementary good.
Winning the Lottery
What would you do if you won the lottery? This clip fits nicely with two different sections of an economics course. The first is how people respond to income increases in terms of purchasing normal goods or luxury goods. For labor economics, this discussion is a good segue to discussion how increases in income decrease the time people devote to work assuming leisure is a normal good.