During the 1950s, the Fed targeted

Refer to the figure above. Which of the following methods is the best to compensate the losers from opening Lithasia to international trade?

A) Sellers in Lithasia could be taxed and the revenue could be used to compensate buyers. B) Buyers in Lithasia could be taxed and the revenue could be used to compensate sellers. C) Both buyers and sellers could be taxed and the revenue could be retained by the government. D) The sellers in Lithasia could sell the pens at a price above the equilibrium price in the domestic market.

The figure above shows the costs and benefits associated with producing paper. What is the marginal external cost when output is 6 tons?

A) $1,600 B) $1,200 C) $1,000 D) $600 E) $400