1. Ali and Baba are thirsty. Ali has 60 cents, and Baba has $1 to spend on a drink. With the money he has, Ali would buy a 6 – oz. bottled water for 60 cents and Baba would buy a 16 – oz. bottled water for $1. However, if they pool their funds, they can buy a 32 – oz. bottled water for $1.60. What is the pie? (in ounces) a. 6 oz b. 9 oz c. 10 oz d. 12 oz e. None of the above 2. Ali and Baba are thirsty. Ali has 60 cents, and Baba has $1 to spend on a drink. With the money he has, Ali would buy a 6 – oz. bottled water for 60 cents and Baba would buy a 16 – oz. bottled water for $1. However, if they pool their funds, they can buy a 32 – oz. bottled water for $1.60. How much water do we expect Ali will get as a result of the negotiation? a. 6 oz b. 11 oz c. 12 oz d. 16 oz e. None of the above 3.Abe and Bea each have some money to invest in a CD (Certificate of Deposit). Abe has $5,000 and Bea has $20,000. Both are interested in making a 6-month investment at Synchrony Bank. The CD rates for Synchrony Bank (as of July 8, 2015) are as listed below. With 0.41% interest, Abe would get $5,010 in six months. With 0.50% interest, Bea would get $20,050 at the end of six months. If they pool their funds, they will be able to purchase a $25,000 CD, which pays a higher interest rate. The 0.60% interest will return $25,075 at the end of six months. Obviously, Abe gets back his $5,000 principle, and Bea gets back her $20,000 principle. How should the $75 interest be divided between the two of them? Write Abe’s share. _______________ 4.A real negotiation: two couples were each looking for an apartment in Cambridge, Massachusetts. On their own, one was looking to buy a two-bedroom apartment for $600,000, and the other was looking to buy a three-bedroom apartment for $800,000. As the two couples were friends, they considered buying a two-family home together. They soon found a house they both liked for $1.2 million. One half was two bedrooms, and the other half was three bedrooms. Everyone was happy. But they had to figure out how to split the purchase price. What is the pie or savings? a. $100,000 b. $200,000 c. $300,000 d. $400,000 e. None of the above 5. Ali and Baba are fighting over $100. Ali claims he should get $80, leaving Baba with only $20. Baba thinks he should get $60 while Ali gets $40. According to the Principle of the Divided Cloth, how much money should Ali receive? a. $20 b. $40 c. $60 d. $80 e. None of the above 6. Suppose that A and B benefits changed based on whether or not they work together. Imagine they are negotiating over a lease on some office space. In this case A and B would gain more from having the office space all to itself. Say, A’s benefit from leasing the offices on its own is 100 while its benefit from sharing the offices with B is only 85. Similarly, B’s benefit from leasing the offices on its own is 200 while its benefit from sharing the offices with A is only 175. How then do we calculate how much each party should pay when they work together? Let’s go through the example when the cost is 100. We first want to calculate the pie. The pie is a. 15 b. 35 c. 50 d. 80 e. None of the above