While Amy is a bit confused with her new love interest, her coworkers are debating the necessary requirements to be considered racist. In Becker’s discrimination model, firms are assumed to have preferences for one group of workers relative to others. In the taste for discrimination model, firms demand more workers from a preferred group. Dina nicely points out, “Isn’t having a preference the definition of racism?”
Amy is single again and is talking about the new things she wants to do with her free time. She’s bought some plants and wants to start doing puzzle games, but her coworkers don’t seem all that excited for her. Tastes and preferences are an important factor in analyzing markets.
Glenn has brought all of his previous foster children to the store so that he can get a group photo with all of them. While working in the backroom, Glenn mentions to Cheyenne that his family used to own a photo studio. Cheyenne is surprised that people used to pay to have their picture taken since she has grown up with digital cameras and cell phone cameras. With these inventions, there’s really not a reason to pay to have your photo taken, but Glenn says it was mainly for families and lonely women with dogs.
Garrett announces that there will be a 40% reduction in the price of exercise gear because the store is closing that section due to a lack of interest. If people aren’t buying the products on the shelves, Cloud 9’s opportunity cost may be high enough to encourage them to remove that section and replace it with a more profitable item. The price reduction should increase the quantity demanded for the exercise gear.
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.
A customer is having trouble identifying a new toothbrush to help with his tartar problem. With all the options available, some companies advertise as being good at fighting plaque while others focus on tartar prevention. When consumers have a lot of options, it’s sometimes hard to fully consider the tradeoffs. This paradox of choice can explain why some people don’t behave rationally when presented with a seemingly overwhelming number of options.
Each year employees participate in Color Wars, where the employees are divided between two teams to see which team can sell the most during the day. Glenn announces that the winning team will receive a pizza party. While the employees aren’t overly happy about either the Color Wars or the pizza party, incentives can usually be a way to induce higher levels of productivity. It turns out that each team member also receives $100, but Glenn was saving it as a surprise incentive. Amy has to explain to him that incentives need to be announced at the beginning in order for them to actually work.
Mateo and Cheyenne discuss what they would do if they won the lottery. The two list a variety of different items they would spend their money on after receiving their income boost. This income adjustment would result in the two of them purchasing normal goods, specifically luxury goods. These purchases are driven by income changes, not by the price of those products.