Figure 10-10
-Refer to Figure 10-10. Consider the budget constraint BC₁. If the price of DVDs is $20 and the price of CDs is $10, what is the consumer's income?

Question

Figure 10-10 -Refer to Figure 10-10. Consider the budget constraint BC₁. If the price of DVDs is $20 and the price of CDs is $10, what is the consumer's income?

Quizplus · Accepted Answer

The budget constraint BC1 represents the maximum amount the consumer can spend on DVDs and CDs. If the price of DVDs is $20 and CDs is $10, and assuming the consumer spends all their income, the income can be calculated by finding the maximum number of DVDs and CDs that can be purchased. If the consumer buys 12 DVDs (12 x $20 = $240) or 24 CDs (24 x $10 = $240), the income is $240.

Figure 10-10 -Refer to Figure 10-10. Consider the Budget Constraint BC1. If

Figure 10-10 -Refer to Figure 10-10. Consider the Budget Constraint BC₁. If