Suppose a Consumer Is Currently Spending All of Her Available

question 129

Multiple Choice

Suppose a consumer is currently spending all of her available income on two goods: music CDs and DVDs. If the price of a CD is $9, the price of a DVD is $18, and she is currently consuming 10 CDs and 5 DVDs, what is the consumer's income?

• A)$90
• B)$180
• C)$270
• D)$360

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Definitions:

Diversification

The strategy of spreading investments among various financial instruments or sectors to reduce risk.

Synergy

The concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts.

Earnings Per Share

A financial metric that divides net earnings available to common shareholders by the weighted average number of common shares outstanding.

Mergers and Acquisitions

A general term used to describe the consolidation of companies or assets through various types of financial transactions, including mergers, acquisitions, consolidations, tender offers, purchase of assets, and management acquisitions.