(Scenario: Music Downloads and Streamed Movies)Read the scenario Music Downloads and Streamed Movies.Phillip's optimal consumption bundle will be one whose: Scenario: Music Downloads and Streamed Movies
Phillip has an income of $300 per month,which he uses to purchase music downloads (MD)and streamed movies (SM).Each music download costs $1 and each streamed movie costs $5.
A)budget line is tangent to his highest indifference curve.
B)budget line intersects his highest indifference curve.
C)budget line intersects the music download axis.
D)indifference curve intersects the streamed movies axis.

Question

Quizplus · Accepted Answer

Phillip's optimal consumption bundle, according to economic theory, is found where his budget line is tangent to his highest attainable indifference curve. This point represents the most preferred combination of goods (music downloads and streamed movies) he can afford given his budget constraints.

(Scenario: Music Downloads and Streamed Movies)Read the Scenario Music Downloads