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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Point E is the point on the budget constraint where the highest attainable indifference curve is tangent. This represents the point of utility maximization under current budget constraints. Therefore, option D is the correct statement. Option A is incorrect because the rate at which Kurt is willing to exchange one good for another is equal to the price ratio at the point of utility maximization. Option B is incorrect because an increase in the price of goods would not allow Kurt to attain point B, it would actually shift the budget constraint inward. Option C is incorrect because it is an incorrect equation.

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