Jeff, Fran, and Rudy Are Dividing an Estate Consisting of a House

question 20

Essay

Jeff, Fran, and Rudy are dividing an estate consisting of a house, a car, and a boat, using the Method of Sealed Bids. Their bids on each of the items are given in the following table. Which item(s), if any does Rudy receive, and how much money does he pay/receive, including any surplus?

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Definitions:

Diminishing Marginal Utility

The principle that as a person consumes more of a good, the additional satisfaction gained from consuming an additional unit decreases.

Plastic Bins

Containers made of plastic material used for storing or transporting items.

Door Hooks

Hardware items typically mounted on doors or walls for hanging or holding clothes, towels, and other items securely.

Marginal Utility

The added satisfaction or utility that a consumer receives from consuming one additional unit of a good or service.