-Refer to the Above Figure $\mathrm { D } _ { 2 }$

question 81

Multiple Choice

-Refer to the above figure.Suppose demand is $\mathrm { D } _ { 2 }$ and then increases to $\mathrm { D } _ { 3 }$
) The change in economic rent is

• A)zero.
• B)area CIHF.
• C)area CIGO.
• D)area BJC.

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Definitions:

Interest Rate

The cost of borrowing funds, typically expressed as a percentage of the total amount loaned, which accrues over time.

WARP

stands for Weak Axiom of Revealed Preference, a principle in consumer theory that states if a consumer prefers bundle A to bundle B when both are affordable, then the consumer will not choose B when A is affordable.

Lender

A person, organization, or entity that provides funds to others under the agreement that the funds will be repaid, typically with interest, over a specified period.

Utility-Maximizing

The process or behavior of selecting the combination of goods and services that provide the highest utility or satisfaction to an individual, given their budget constraint.