nice of high or low transaction costs? 4. Arthur alleges that Betty borrowed a valuable kettle and broke it, so he sues to recover its value, which is $500. The facts are very confusing. Betty contends that she did not borrow a kettle from Arthur; even if it is proved that she borrowed a kettle from Arthur, she contends it is not broken; even if it is proved that she borrowed a kettle from Arthur and that it is broken, she contends that she did not break it. Assume that because the facts in the case are so unclear, Arthur and Betty independently believe that the chances of either side's winning in court are an even 50 percent. Further, assume that litigation in small claims court will cost each party $100 and that the costs of settling out of court are nil. So, cooperation in this case is a matter of settling out of court and saving the cost of a trial. Noncooperation in this case means trying the dispute. Make sure you justify/explain your answers. a. What is Arthur's threat value? b. What is Betty's threat value? c. If Arthur and Betty cooperate together in settling their disagreement, what is the net cost of resolving the dispute? d. What is the cooperative surplus? e. What is a reasonable settlement between Arthur and Betty