Live or dead is purely owners preference, as long as you thaw out the rat/mouse correctly and you are responsible about feeding live. Don't leave a live rat in the cage with a snake for more than an hour, and keep an eye on them.
In the cage, hands down. It's less stressful on the animal, they're in a familiar environment, and you don't have to handle them (and cause possible regurge issues) to and from a bin.
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