A Consumer Is Currently Spending All of Her Available Income

question 285

Multiple Choice

A consumer is currently spending all of her available income on two goods: music CDs and DVDs. At her current consumption bundle, she is spending twice as much on CDs as she is on DVDs. If the consumer has $120 of income and is consuming 10 CDs and 2 DVDs, what is the price of a DVD?

• A)$4
• B)$8
• C)$12
• D)$20

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Definitions:

Visual Images

Mental representations created by the brain that can simulate or recreate sensory experiences without external stimuli.

Self-Referent Encoding

A cognitive process where individuals relate information to themselves, enhancing memory and recall.

Prospective Memory

The aspect of memory that involves remembering to perform a planned action or intention at the appropriate future time.

Spreading Activation

A process in cognitive psychology that explains how information is retrieved in the brain, where activation of one concept triggers the activation of related concepts.