Show your friends this quiz! Try out this quiz, it works for mainly everyone! Answer questions that most fit your personality to get your true color. You can be blue: a caring sensitive person, orange: a risk-taking easy going.
This increase in the size of the budget set implies that the consumer will be better-off as defined with the new consumer optimum at point T. With this increase in income, the consumer chooses to consume both more of both goods indicating that they are both normal goods to that individual.
I will first explain critical points theoretically. One type of critical point is a local minimum or maximum in the graph. The equation y = x2 has a local minimum at (0, 0). It is a point at which the curve is lower than the surrounding points on either side. In this case, the minimum is also absolute, because it is the lowest part of the whole curve. The second sort of critical point is an inflection point. This is a point in the graph where on one side, the slop is increasing, and on the other side, the slope is decreasing. This can happen whether the curve is increasing or decreasing. Look in the following graph at the first inflection point.