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Denny gives each of his two daughters a glass of milk and six cookies for lunch. The two daughters want to trade so that one will drink the two glasses of milk and the other will eat the dozen cookies. Does economic analysis imply that Denny should allow his children to engage in this trade? Landing fees at many airports are based on aircraft weight. However, these fees do not accurately measure the cost associated with a landing or takeoff. This is because the opportunity cost of a plane using a runway primarily reflects the amount of time that other aircraft no longer have access to the runway, and this amount of time is largely independent of the weight of a plane. If landing fees at heavily used airports are set below market-clearing levels and are based on aircraft weight, explain why there may be some significant costs associated with such an approach.
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