Suppose that you and your roommate are renting a 2-bedroom apartment that costs $1000 per month....

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Suppose that you and your roommate are renting a 2-bedroom apartment that costs $1000 per month. The two bedrooms, the Big Bedroom and the Small Bedroom, are not equally desirable, but they are each okay. So you and your roommate decide that you will pay unequal rents depending on who takes the Big Bedroom and who takes the Small Bedroom. (a) Why is there a rent so that you would be equally happy to live in the Big Bedroom for that rent or live in the Small Bedroom for $1000 minus that rent? (b) Why can you find prices for living in the apartment where both you and your roommate are happy to pay the price you each get? Suppose that you and your roommate are renting a 2-bedroom apartment that costs $1000 per month. The two bedrooms, the Big Bedroom and the Small Bedroom, are not equally desirable, but they are each okay. So you and your roommate decide that you will pay unequal rents depending on who takes the Big Bedroom and who takes the Small Bedroom. (a) Why is there a rent so that you would be equally happy to live in the Big Bedroom for that rent or live in the Small Bedroom for $1000 minus that rent? (b) Why can you find prices for living in the apartment where both you and your roommate are happy to pay the price you each get?

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Answer i a The rent should be such that you would be equally happy to live in the Big Bedroom or the ... View the full answer