Figure 10-5
-Refer to Figure 10-5.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 10-5 
-Refer to Figure 10-5.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 combinations of DVDs and CDs that a consumer can purchase with their income. If the price of DVDs is $20 and CDs is $10, and assuming the budget constraint is a straight line, the consumer's income can be calculated by determining the maximum amount of either good they can purchase. If the consumer spends all their income on DVDs, they can buy 12 DVDs (since $240/$20 = 12), or if they spend it all on CDs, they can buy 24 CDs (since $240/$10 = 24). Therefore, the consumer's income is $240.

Figure 10-5 -Refer to Figure 10-5.Consider the Budget Constraint BC1.If the Price