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

Answer:

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

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.