Paul has two tickets to the next Texan game while Bella has two tickets to the next Rockets game. Bella values the Rockets tickets at $200 while she values the Texans tickets at $250. Paul values the Rockets tickets at $250 and the Texans tickets at $150. Allocative efficiency can be improved for Paul and Bella if

Paul and Bella exchange tickets for a price agreeable to both.

Explanation:

The options to this question wasn't provided. Here are the options:

Paul buys the Rockets tickets from Bella and keeps the Texan tickets.

Bella buys the Rockets tickets from Paul and keeps the Rockets tickets.

Paul and Bella exchange tickets for a price agreeable to both.

Allocative efficiency is when the marginal cost of the last unit produced equals the marginal benefit.

Bella values the Texans tickets more than the Rockets tickets while Paul values the rockets ickets more than the Texans tickets. Therefore, they should both trade their tickets for the ones they each value more.

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