.. Microeconomics

3. Consider the following options: Lottery A. Take $1 million for sure . Lottery B. Get $5 million with probability 0.9 (and nothing otherwise). Lottery C. Get $1 million with probability 0.1 (and nothing otherwise). Lottery D. Get $5 million with probability 0.9 (and nothing otherwise). (By the way, how would you rank A vs. B and C vs D?) For the DM to be consistent with Expected utility hypothesis, we must have a. A > B if and only if C > D. b. A > B if and only if C > D. c. A~B~C~D. d. None of the above.4. (25 points) Three oligopolists operate in a market with inverse demand given by P(Q) = a - Q, where Q = q1 + 92 + 93 and q; is the quantity produced by firm i. Each firm has a constant marginal cost of production, c, and no fixed cost. The firms choose their quantities as follows : (1) firm 1 chooses q1 2 0; (2) firms 2 and 3 observe q and then simultaneously choose 42 and 43, respectively. What is the subgame-perfect outcome