(Scenario: Tom's Budget Constraint)Use Scenario: Tom's Budget Constraint.The combination of _____ music downloads and _____ movies lies ON Tom's budget line. Scenario: Tom's Budget Constraint
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
A)50;10
B)50;0
C)0;5
D)100;5

Question

Quizplus · Accepted Answer

Since Tom has a budget of $50, and the price of a music download is $1 and the price of a movie is $5, he can afford to buy a maximum of 50 music downloads or 10 movies. The combination of 50 music downloads and 0 movies lies ON Tom's budget line. Any other combination of music downloads and movies would be either inside or outside of the budget line, which means that they would either not exhaust the budget or be too expensive. Therefore, the best choice for Tom is to allocate his budget fully to music downloads and not buy any movies, which is represented by choice B.