The price of DVDs (D) is $20 and the price of CDs (C) is $10. Philip has a budget of $100 to spend on the two goods. Suppose that he has already bought one DVD and one CD. In addition there are 3 more DVDs and 5 more CDs that he would really like to buy.
a. Given the above prices and income, draw his budget line on a graph with CDs on the horizontal axis.
b. Considering what he has already purchased and what he still wants to purchase, identify the three different bundles of CDs and DVDs that he could choose. For this part of the question, assume that he cannot purchase fractional units.