They Are Thinking of Buying a Sofa

question 13

Multiple Choice

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.

---

Definitions:

War on Drugs

The War on Drugs is a government-led initiative aimed at stopping the illegal drug trade, reducing drug addiction and abuse, and enforcing drug prohibition laws.

Substance Abuse

The misuse of drugs or alcohol that leads to clinical impairment or distress.

DiClemente and Prochaska Model

A model describing a five-stage process of change for individuals overcoming addictive behaviors and other negative habits.

Precontemplation

A stage in the behavior change process where the individual is not yet considering change or is unaware of the need for change.