Refer to above figures. Prior to the shift of the curves, which ...

[crobinson2013]

Refer to above figures. Prior to the shift of the curves, which panel and which curve involve the existence of negative externality?
 
  A) Panel 1 and S1
  B) Panel 1 and S2
  C) Panel 2 and D1
  D) Panel 2 and D2

Question 2

In the classical model, a shift to the right in aggregate demand would result in
 
  A) a permanent increase in unemployment.
  B) a permanent increase in real incomes.
  C) an increase in the price level.
  D) a permanent shift past full employment.

[komodo7]

Answer to Question 1

A

Answer to Question 2

C