question 16\n5 points\ntwo siblings inherit a...
question 16\n5 points\ntwo siblings inherit an estate and decide to use the sealed - bids method to divide the assets. the dollar values assigned by each sibling for each asset are shown in the following table.\n| | edgar | katy |\n|--|--|--|\n| house | $250,000 | $180,000 |\n| land | $100,000 | $170,000 |\n| total | $350,000 | $350,000 |\nhow much is each persons surplus share?\na $70,000\nb $35,000\nc $75,000\nd $50,000
Answer
# Explanation:
## Step1: Calculate fair - share
The total value of the estate according to each sibling is $350000$. The fair - share for each sibling is $\frac{350000}{2}= 175000$.
## Step2: Calculate Edgar's surplus
Edgar values the house at $250000$ and the land at $100000$. If he gets the house (since he values it more), his share is $250000$. His surplus is $250000 - 175000=75000$.
## Step3: Calculate Katy's surplus
Katy values the land at $170000$ and the house at $180000$. If she gets the land (since she values it more), her share is $170000$. Her surplus is $170000 - 175000=- 50000$ (but we consider the non - negative value of surplus in the context of the better - than - fair share concept). In a more balanced way, if we assume an ideal division where each gets a fair share of the value they assign, the surplus for each when considering the overall fair - share calculation is based on the fact that the total value assigned by each is $350000$ and fair - share is $175000$. So the surplus for each person is $350000\div2 - 175000 = 35000$.
# Answer:
B. $35,000$