Figure 21-7
-Refer to Figure 21-7. Suppose a consumer has $500 in income, the price of a book is $10, and the value of B is 50. What is the price of a DVD?
A)$5
B)$10
C)$50
D)$100

Question

Figure 21-7 
-Refer to Figure 21-7. Suppose a consumer has $500 in income, the price of a book is $10, and the value of B is 50. What is the price of a DVD?
A)$5 
B)$10 
C)$50 
D)$100

Quizplus · Accepted Answer

Using the given formula: 
(B/$P_B) = (D/$P_D)
(50/$10) = (D/$P_D)
5 = (D/$P_D)
Therefore, the price of a DVD is $5.

As for the best choice(s), it depends on the consumer's preferences and budget constraints. If the consumer values DVDs more than books and can afford to purchase both, they can buy 5 DVDs and 0 books with their $500 income. If the consumer values books more than DVDs and wants to maximize their overall satisfaction, they can buy 0 DVDs and 50 books with their $500 income.

Figure 21-7 -Refer to Figure 21-7. Suppose a Consumer Has $500 in Has