Raul has 4 Cal Ripken and 2 Nolan Ryan baseball cards. The prices of these baseball cards are $24 for Cal and $12 for Nolan. Raul, however, would be willing to exchange 1 Cal card for 1 Nolan card.
a. What is Raul's marginal rate of substitution of Cal Ripken in place of Nolan Ryan baseball cards?
b. Can Raul buy and sell baseball cards to make himself better off? How?
c. Suppose Raul has traded baseball cards and after trading still has some of each kind of card. Also, he now no longer wants to make any more trades. What is his marginal rate of substitution of Cal Ripken in place of Nolan Ryan cards now?