Refer to the information provided in Figure 6.5 below to answer the question(s) that follow. Figure 6.5
-Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $75, the price of a DVD is $3 and the price of a CD is $5. At point D, she is buying ________ DVDs and ________ CDs.
A) 0; 15
B) 25; 0
C) 25; 15
D) 50; 30

Question

Refer to the information provided in Figure 6.5 below to answer the question(s) that follow.  Figure 6.5
-Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $75, the price of a DVD is $3 and the price of a CD is $5. At point D, she is buying ________ DVDs and ________ CDs.
A) 0; 15 
B) 25; 0 
C) 25; 15 
D) 50; 30

Quizplus · Accepted Answer

At point D, Molly is at the extreme end of her budget constraint where she spends all her income on DVDs and none on CDs. Given her income is $75 and the price of a DVD is $3, she can buy $75/$3 = 25 DVDs.

Refer to the Information Provided in Figure 6