Suppose a market with a Cournot structure has five firms and a market price elasticity of demand equal to -2. What is a Cournot firm's Lerner Index?

If you accept the rational expectations hypothesis as accurate, what would you tell monetary policy makers who ask you how to more effectively manage the economy?

A) Individuals do understand how monetary policy works, so consistency and predictability are the keys to effective policy making. B) Only unanticipated policies will be effective once individuals understand how monetary policy works. C) Consumers do not understand the workings of monetary policy, so discretionary and nondiscretionary policies are equally effective. D) Individuals base their economic expectations solely on current information, so repeating policy decisions that have worked in the past is the most effective path to take.

The United States has numerous antitrust laws on the books and numerous legal precedents on acceptable corporate behavior. Still, the true commitment to enforcement is measured by the

a. number of monopolies we sue b. number of monopolies we break up c. partiality of the federal judges d. willingness of industry to behave e. budget of the enforcement agencies