Question

Based on his​ preferences, Bill is willing to trade 5 movie tickets for 1 ticket to a basketball game. If movie tickets cost ​$10 each and a ticket to the basketball game costs ​$46​, should Bill trade movie tickets for basketball​ tickets? Why or why​ not?

Answer 1

Bill shouldnt trade movie tickets for basketball​ tickets, since MRS > Pb/Pm.

Step-by-step explanation:

Price ratio = Pb/Pm

= $46/$10

= 4.6

MRS = 5/1

= 5

MRS > Pb/Pm

Therefore, Bill shouldnt trade movie tickets for basketball​ tickets, since MRS > Pb/Pm.