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:

Slavery Public Debate

The widespread discussion and contention over the moral, economic, and political aspects of slavery, particularly significant in the United States before the Civil War.

Indentured Servants

Individuals who agreed to work for a certain number of years in exchange for passage to a new country, usually without pay but with food, accommodation, and training.

Separation Of Church

This principle denotes the division between religion and government, ensuring that religious groups do not govern the state, and the state does not have official religion.

Religious Pluralism

An attitude or policy regarding the diversity of religious belief systems co-existing in society.