Question

Bob and Tom are graduating and are no longer going to be roommates, but they both want to keep the dog they adopted.

Using the Method of Sealed Bids, Bob bids $283 and Tom bids $463 for the dog.
Since Tom's bid is higher, he gets the dog.
How much will he have to pay Bob in order to keep the division fair?
Round your answer to the nearest dollar.

Answer 1

To make the division fair after using the Method of Sealed Bids, Tom should pay Bob $90 since he had the higher bid for the dog they both wanted to keep.

Step-by-step explanation:

When Bob and Tom use the Method of Sealed Bids to decide who keeps their dog, they are essentially bidding for how much they value the dog. Tom bids $463 and Bob bids $283. Tom’s higher bid means he gets the dog, but to make the division fair, Tom needs to compensate Bob. The fair outcome is achieved by Tom paying Bob half the difference between the two bids. The difference is $463 - $283 = $180. Half of $180 is $90. Therefore, Tom should pay Bob $90 to keep the division fair.

In order to keep the division fair, Tom will have to pay Bob the difference between their bids. Tom's bid was $463 and Bob's bid was $283, so the difference is $463 - $283 = $180.

Tom will have to pay Bob $180 in order to keep the division fair.