Thurman is a writer who works from his home. Thurman lives next door to Phil, the drummer for a local band. Phil needs a lot of practice to earn $250, which is his share of the band's profit. Thurman gets distracted by Phil's drumming but he needs to get his writing done to earn $500 for his current article. Which of the following is an efficient solution?
A)Phil offers Thurman $499 to allow Phil to continue drumming. Thurman accepts and both are better off.
B)Phil offers Thurman $249 to allow Phil to continue drumming. Thurman accepts and both are better off.
C)Thurman offers Phil $251 to stop practicing his drumming. Phil agrees and both are better off.
D)Thurman offers Phil $501 to stop practicing his drumming. Phil agrees and both are better off.

Question

Quizplus · Accepted Answer

In this scenario, both Thurman and Phil can be better off if Thurman offers Phil $251 to stop practicing his drumming. This way, Phil can earn his $250 share by agreeing to stop drumming and allowing Thurman to work in peace. Thurman can also earn his $500 without any distractions from the drumming. Therefore, both parties benefit from this solution. Option A and D are not efficient as they involve overpaying for the solution. Option B may not be satisfactory for Thurman as he may still get distracted by the drumming.

Thurman Is a Writer Who Works from His Home