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 consumer's income, which is the total amount they can spend on DVDs and CDs. If the price of DVDs is $20 and the price of CDs is $10, and assuming the budget constraint allows for combinations that sum to the maximum income, the income would be $240. This is calculated by determining the maximum number of DVDs (12) or CDs (24) that can be purchased with the given prices, leading to an income of $240.

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