Sefronia and Bella share an apartment and they are deciding whether or not to purchase a weekly housecleaning service.The value of the service to each of them is $50 and it costs $80 to hire a housecleaner.Should they hire a housecleaner?

Question

Quizplus · Accepted Answer

The cost of hiring a housecleaner is $80, which is more than the value of the service to either Sefronia or Bella ($50). However, if they split the cost evenly (each contributing $40), then they will both gain a consumer surplus of $10 ($50 value of service - $40 cost), making it a worthwhile investment. Therefore, they should hire the housecleaner. Choice B is incorrect because there is no indication that either Sefronia or Bella would wait for the other to hire a housecleaner. Choice C is not relevant because there is no mention of finding a housecleaner who will accept $50. Choice D is also not relevant because there is no indication that they would have difficulty agreeing on which housecleaning service to use.

Sefronia and Bella Share an Apartment and They Are Deciding