When a classmate’s house burns down, the Pritchett family bands together to find things to donate to their cause. Manny and Luke are put in charge of a remote controlled helicopter that Manny has been coveting. Luke convinces Manny to fly it and they promptly lose the helicopter. Manny is scared of what Gloria will do when she finds out and threatens to walk to Canada if they do not find it. Luke replies that he hopes Manny likes taxes. Canada does tend to have higher tax rates than the United States, but there are also differences in the services provided by the two governments.
See more: budget balance, comparative systems, inequality, macro, role of government, taxation
Homes and yards that are improperly maintained decrease the property value of neighbors. This is a negative externality. To prevent this from happening, many modern neighborhoods have an HOA. The HOA decides what changes homeowners are allowed to make to their property and act as a non-market solution to externalities. They only allow changes that either do not impact the property value of other homes (no externalities) or that increase the property value of other homes (a positive externality). In this clip, Claire attends her HOA’s meeting. She submitted a proposal to build a “she shed” in her backyard that was denied. She believes this was not appropriate because the shed won’t be visible from the street and will not impact neighbor property values. What she doesn’t know is that her son, Luke, intercepted the request and responded with a fake denial so the HOA doesn’t understand why she is so belligerent. Phil shows up to warn her but is a little late…
See more: Coase theorem, collective action, government regulation, negative externalities, non-market solutions, permits, regulation, role of government