Recall Bob and Ray in Problem 4

question 12

Multiple Choice

Recall Bob and Ray in Problem 4. They are thinking of buying a sofa. Bob's utility function is U_B(S, M_B) = (1 + S) M_B and Ray's utility function is U_R(S, M_R) = (2 + S) M_R, where S = 0 if they don't get the sofa and S = 1 if they do and where M_B and M_R are the amounts of money they have respectively to spend on their private consumptions. Bob has a total of $2,000 to spend on the sofa and other stuff. Ray has a total of $3,000 to spend on the sofa and other stuff. The maximum amount that they could pay for the sofa and still arrange to both be better off than without it is

• A) $3,000.
• B) $1,500.
• C) $2,000.
• D) $1,050.
• E) $4,000.

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Definitions:

Lineages

Social groups or entities comprised of individuals who trace their ancestry to a common ancestor in a direct line, often playing significant roles in societies' organization.

Ancestor

A person from whom one is descended, often referred to in a familial or cultural context, and sometimes revered.

Patrilineal Descent

Descent traced exclusively through the male line of ancestry to establish group membership.

Descent Group

A social group whose members talk about common ancestry through a line of descent that could be maternal, paternal, or both.