A budget constraint represents the combinations of goods and services that a consumer can purchase given current prices with his or her income. Consumer theory uses the concepts of a budget constraint and a preference map to analyze consumer choices. Both concepts have a ready graphical representation in the two-good case.
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Famous quotes containing the words budget and/or constraint:
“You can fool all the people all the time if the advertising is right and the budget is big enough.”
—Joseph E. Levine (b. 1905)
“In America a woman loses her independence for ever in the bonds of matrimony. While there is less constraint on girls there than anywhere else, a wife submits to stricter obligations. For the former, her father’s house is a home of freedom and pleasure; for the latter, her husband’s is almost a cloister.”
—Alexis de Tocqueville (1805–1859)