They Are Thinking of Buying a Sofa

question 12

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) = (4 + 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 $800 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)$1,000.
• B)$1,200.
• C)$1,800.
• D)$650.
• E)$2,400.

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Definitions:

Attachment Behaviors

Actions and patterns of behavior that are designed to achieve closeness to an attachment figure, typically aimed at maintaining safety and security.

Crawling

The action of moving on all fours, typically noted as an early form of locomotion in infants before they learn to walk.

Distress

Negative stress that results in anxiety, depression, or other negative feelings, contrasting with positive stress which can be motivating.

Vygotsky

Lev Vygotsky, a Russian psychologist known for his theory on social development, emphasizing the influence of social interaction on cognitive development.