Hippo, Lion, and Possum must decide how to split up the three bedrooms (big, medium, and small) in the house that they are renting. Hippo values the big bedroom at $700, the medium bedroom at $200, and the small bedroom at $100.Lion values the big bedroom at $500, the medium bedroom at $300, and the small bedroom at $100.Possum values the big bedroom at $300, the medium bedroom at $200, and the small bedroom at $100.The bedrooms are indivisible. No animal can use more than one bedroom. (That is, the marginal value of a second or third bedroom is $0.)Which of the following splits is efficient?All of these splits are efficient. None of these splits are efficient. Hippo gets the medium bedroom; Lion gets the small bedroom; Possum gets the big bedroom. Hippo gets the small bedroom; Lion gets the big bedroom; Possum gets the medium bedroom.
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Hippo, Lion, and Possum must decide how to split up the three bedrooms (big, medium, and small) in t...
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