Consider the monopoly in the figure below with price regulated at $2 per unit. The regulated price will result in a: 
A. surplus of 2 units.
B. surplus of 5 units.
C. shortage of 2 units.
D. shortage of 5 units.
Answer: D
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If an industry has a Herfindahl index of 10,000, then
A. the industry is a single firm. B. it is perfectly competitive. C. it is considered a duopoly. D. it is considered an oligopoly.
The Tiebout model assumes that public services are financed by a proportional property tax.
A. True B. False C. Uncertain
The socially optimal level of output of a good with an externality occurs when
a. the marginal private costs of production are equal to marginal private revenues b. the firm maximizes its profits c. the consumer maximizes his or her utility d. the marginal social cost of production equals the marginal social benefit of the good e. the firm is making a normal profit
A worker who loses a job at a petroleum refinery because consumers and business firms switch from the use of oil to natural gas is an example of
A. frictional unemployment. B. structural unemployment. C. cyclical unemployment. D. disguised unemployment.