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The price of DVDs (D) is $10.00 and the price of CDs (C) is $5.00. Katrina has a budget of $50.00 to spend on

  

The price of DVDs (D) is $10.00 and the price of CDs (C) is $5.00. Katrina has a budget of $50.00 to spend on the two goods. Suppose that she has already bought 1 DVD and 1 CD. In addition, there are 3 more DVDs and 7 more CDs that she would really like to buy. 1.) Using the line drawing tool, given the above prices and income, draw her budget line in the figure. Label this line 'L'. 2.) Using the point drawing tool, and considering what Katrina has already purchased and what she still wants to purchase, identify the three different bundles of CDs and DVDs that she could choose. Label these points 'bundle 1', "bundle 2', and 'bundle 3'. (Assume that she cannot purchase fractional units) Carefully follow the instructions above, and only draw the required objects. DVDs 12- 10- 84 6- 4- 2- NY 2 -4 -co 6 -0 8 10 CDs 12 (0,0)

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