
Blair and Devin see an ad for a 2-bedroom apartment for $700 per month. The apartment has 2 bedrooms: the master bedroom and the other bedroom. Blair is willing to pay $425 per month for the master bedroom or $300 per month for the other bedroom. Devin is willing to pay $350 per month for the master bedroom or $325 per month for the other bedroom.
| the master bedroom | the other bedroom |
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Blair | $425 | $300 |
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Devin | $350 | $325 |
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Which room should each person get, and how much should they pay?
First you want to choose which person gets which room.
Person | Value | Payment | Surplus | Room |
---|
Blair | | ? | ? | |
Devin | | ? | ? | |
Total | ? | ? | ? | |
---|
The cost is $700, the total payments is ? + ? = ?, and the total value is + = ?. Blair is paying ? for which they perceive as being worth and Devin is paying ? for which they perceive as being worth . The total payment is ? less than the total perceived value.