What's the consensus about the best way to respond to your SO calling you names (e.g., asshole, dick, etc.)? I've read some posts giving the impression that being called an asshole should be regarded as a badge of honor because it demonstrates you're not being a Beta puss--i.e., if you're pissing her off you must be doing something right. On the other hand, I've read other posts saying that you shouldn't put up with disrespectful behavior, and your SO calling you an asshole (etc.) can be considered disrespectful behavior.
So, what do you say? When your SO calls you an insulting name (e.g., asshole, dick, whatever), how do you typically respond?
Bonus points for anyone who can address the situation where the name calling happens in front of other people and you don't want to escalate the situation for their sake.
EDIT: An example for context: Last Friday night my wife, my oldest daughter (17 years old) and I are watching a movie at home. Wife is on her phone, Facebooking or some stupid shit like that. Because she's not paying attention to the movie, she says every 15 minutes: "What's going on?" I tell her: "If you were watching the movie instead of screwing around on your phone, you wouldn't have to ask." She gets pissed and says: "Stop being an asshole! Tell me what's going on or I'm going upstairs!" Had we been alone, I'd have told her "go upstairs then". But not wanting to escalate in front of my daughter, I told her what was going on.