Answer Happy

3. a. The course notes for Module 8 discuss various kinds of externalities, including both technological and pecuniary externalities. Which of the following are negative pecuniary externalities? A drop in the price of petroleum causes energy company profits to fall, resulting in a general drop in the equities markets, reducing the value of many firms even those not significantly related to the use or sale of energy. b. An oyster harvesting company is required to compensate the state for environmental harm caused by over-harvesting in one of a number of locations. This amount is passed on to oyster buyers, regardless of the source of their oysters, in the form of a surcharge on the price. Airlines using John Wayne Airport in Santa Ana, CA, increase fares to and from that location to cover the additional cost of flight operations designed to reduce noise in residential neighborhoods surrounding the airport. d. Aircraft landing fees at the Memphis airport are increased. This results in higher Federal Express package fees throughout the country, even for ground shipments. A fracking company discovers that the more wells it drills in a particular shale formation, the lower the production from its existing wells. This increases the average cost of production. C. e.