Question
A bee farm (apiary) is located near an orange orchard and an almond tree farm. The bees from the apiary pollinate and feed on the
A bee farm (apiary) is located near an orange orchard and an almond tree farm. The bees from the apiary pollinate and feed on the nectar of the tree blossoms. Trees need pollination to bear fruit. Both orchards draw water from a local water utility company which relies on a main reservoir. The residents of a nearby town also rely on the same water utility. Which of the following is true (select all that apply)?
Group of answer choices
1-From the perspective of the bee keeper, the proximate orchards are a positive externality
2-From the perspective of the orchard farmers, bees are a positive externality
3-The almond trees consume lot of water, prompting the water utility company to raise prices, which increases the operating costs for the orange orchard. The almond orchard has caused a negative externality.
4-The water utility does not raise prices on town residents, who seeing the reservoir levels decline, start to increase their own water consumption. The result is a tragedy of the commons.
5-The local town imposes a water-use fee on the orchards. This is a "Coase" bargain.
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