Use the Following to Answer Question

question 84

Multiple Choice

Use the following to answer question:
-(Figure: Consumer Equilibrium III) Use Figure Consumer Equilibrium III.Given the figure,which of the following statements is TRUE?

• A)At the point of utility maximization,the rate at which Kurt is willing to exchange one good for another is less than the rate at which the goods can be exchanged in the market.
• B)An increase in the prices of tamales and placemats would allow Kurt to attain point B.
• C)At point E,P_x = P_y.
• D)Point E is the point of utility maximization under current budget constraints.

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Definitions:

Implicit Costs

The opportunity costs that arise when a company uses internal resources without a direct payment.

Explicit Costs

Direct payment made to others in the course of running a business, such as wages, rent, and materials.

Accounting Profits

The net income of a company determined by subtracting total expenses from total revenues, according to generally accepted accounting principles.

Economic Profits

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing profit beyond the normal rate of return.