In 2005, a typical U.S. owner of a home theater (a television and a DVD player) bought 12 music CDs (q1) per year and 6 Top-20 movie DVDs (q2) per year. The average price of a CD was about p1 = $15, the average price of a DVD was roughly p2 = $20, and the typical consumer spent $300 on these entertainment goods.17 Based on these data, we estimate a typical consumer's Cobb-Douglas utility function is U = q10.6q20.4. Redraw Figure 4.2 based on this utility function. Explain the shape of the price-consumption curve.
Figure 4.2: Deriving Mimi's Demand Curve

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(a) Indifference Curves and Budget Constraints 12.0 e Price-consumption curve 5.2 4.3 2.8 L' (P, = $12) L° (P, = $4) = $6) Beer, Gallons per year 26.7 44.5 58.9 (b) Demand Curve 12.0 E, E2 6.0 E, 4.0 D', Demand for beer Beer, Gallons per year 26.7 44.5 58.9 .......... ........... Wine, Gallons peryear e P, $ per unit G