1. Assume it is an autumn Saturday in the early afternoon, and you are in a local coffee shop studying. Someone you know comes in for coffee and notices your textbook. This acquaintance proceeds to tell you about how that very morning they were driving near campus and got distracted by an airplane with a trailing advertisement. Your acquaintance asks, "Is my accident an externality situation?" How do you respond?
2. It must be a marathon study session at the local coffee shop - you are still there! You overhear two employees talking about how Columbia's new export policies are restricting international coffee trade. The coffee shop is seeing this through increasing coffee prices as well as through increases in the price of tea. One of the employees looks at you and says, "This is a classic case of an externality, isn't it?" How do you respond?