Find what is the maximum amount that they could pay for sofa


Problem

Albert and Beth are thinking of buying a sofa. Albert's utility function is ua(s; ma) = [1 + s]ma and Beth's utility function is ub(s; mb)=[2 + s]mb, where s = 0 if they don't get the sofa and s = 1 if they do, and ma and mb are the amounts of money they have respectively to spend on private consumption. Albert and Beth each have a total of w = 100 (in $) to spend. What is the maximum amount that they could pay for the sofa and still both be better than without it?

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International Economics: Find what is the maximum amount that they could pay for sofa
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