The Economics of The Office

Learning economics from the world's best boss

The Proposal

Jim pays for fireworks at Toby's farewell party so that he can propose to Pam. Doing so creates a positive externality for everyone at the party. Fireworks are a common example of a public good, because they are both non-rival and non-excludable. This makes it easy for individuals to free ride, utilizing the public good without contributing to its production. Jim learns this first hand when Andy makes the most of the romantic atmosphere.

Season 4 Episode 19 "Goodbye, Toby"

Externalities (D62) Microeconomic Behavior: Underlying Principles (D01)

Phyllis Pam Jim Andy Angela Toby

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