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)
