7. After September 11, the media paid closer attention to the potential use of shipped cargo containers to smuggle weapons and terrorists into the United States.

a. Discuss why there may be a negative externality associated with the use of shipping containers.

b. Graphically show the market for ship transportation of cargo. Make sure you include all the relevant aspects of this market, given your answer to part (a). Explain verbally as necessary.

c. Graphically show any deadweight loss that occurs in this market.

d. Discuss potential ways of reducing or eliminating deadweight loss in this market and the advantages and disadvantages of these remedies, including their impact on other markets.