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.

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Definitions:

Harassment

Unwanted and unwelcoming behavior that includes bullying, discrimination, and sexual harassment, creating a hostile environment for the victim.

Unequal Childhoods

The variations in childhood experiences and opportunities due to socioeconomic, racial, and cultural differences, impacting development and life trajectories.

Annette Laureau

A sociologist known for her work in family sociology, social class, and the transmission of inequality through parenting practices.

Equity

The principle of fairness in treatment and opportunity, which seeks to address disparities in social, economic, and political spheres.