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