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Microeconomics

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MICRO-D4BJXL

Charlie and Mike have whiskey and uniforms.

Charlie’s marginal rate of substitution of whiskey for uniforms is rather high; his MRS is $3$.

Mike has a (relatively) low marginal rate of substation, a MRS of $1$.

Which of the following price ratios will result in Pareto improving trade between Charlie and Mike? $P_{whiskey}/P_{uniforms}=$...

A

$4.5/1$

B

$2.5/1$

C

$2/3$

D

$1/5$