Answer:
$70,000
Step-by-step explanation:
To determine the surplus for each sibling in the sealed bids method of dividing assets, each sibling submits a sealed bid for each asset. The asset is awarded to the sibling who bids the highest. The surplus for each sibling is the difference between the value they assign to an asset and the bid they need to pay, which in this case is the highest bid placed by either sibling.
Let's break down the bidding:
**Asset: Land**
- Edgar's value: $250,000
- Katy's value: $180,000
- Highest bid: Edgar's $250,000
- Edgar pays: $180,000 (Katy's highest bid)
- Katy pays: $0 (since she didn't win the bid)
**Surplus for Land**:
- Edgar's surplus: \( \text{Value - Highest bid by Katy} = $250,000 - $180,000 = $70,000 \)
- Katy's surplus: $0 (she didn't win the land)
**Asset: Another asset (not specifically named, so we'll just call it "Asset")**
- Edgar's value: $100,000
- Katy's value: $170,000
- Highest bid: Katy's $170,000
- Edgar pays: $0 (since he didn't win the bid)
- Katy pays: $100,000 (Edgar's highest bid)
**Surplus for Asset**:
- Edgar's surplus: $0 (he didn't win the asset)
- Katy's surplus: \( \text{Value - Highest bid by Edgar} = $170,000 - $100,000 = $70,000 \)
**Final Surplus Calculation**:
- **Edgar's Total Surplus**: $70,000 (from the land)
- **Katy's Total Surplus**: $70,000 (from the other asset)
Each sibling ends up with a surplus of $70,000 from the assets they respectively won.