In breaking up the Standard Oil Company, the U.S. Supreme Court established that a company's violation of the Sherman Antitrust Act was determined by:
A. whether or not the firm engaged in "unfair business practices."
B. the structure of the industry.
C. the percentage of the market controlled by the firm.
D. concentration ratios.
Answer: A
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____________ is a state of preferring a certain return to an uncertain prospect that generates the same expected return.
Fill in the blank(s) with the appropriate word(s).
Sam has preferences for weekly Video Games (V) and Sodas (S) described by the utility function U(V,S) = V2S2. Suppose the prices are denoted by pV and pS and Sam has income given by I
Assume that in Sam's optimal bundle, he consumes strictly positive quantities of both goods. a. Write out Sam's optimization problem and the associated Lagrangian expression. b. Compute the three critical value (first-order) conditions from the Lagrangian. c. Using your answer to b, find the expression for the optimal bundles as functions of the prices and income.