They Are Thinking of Buying a Sofa

question 6

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) = (3 + 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 $1,200 to spend on the sofa and other stuff.Ray has a total of $4,000 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)$1,333.33.
• B)$1,600.
• C)$850.
• D)$2,400.
• E)$3,200.

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Definitions:

Steps

The individual actions or procedures taken in sequence to accomplish a task or solve a problem.

If Statements

Conditional statements in programming that execute different code blocks based on whether a specified condition is true or false.

Access Macros

Predefined actions or sets of actions that can be executed in Microsoft Access to automate tasks.

MessageBox Action

A command in programming that causes a dialog box to appear with a message for the user.