Budget Constraint


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Budget Constraint

The goods and services an individual is able to purchase over a given period of time at his/her current income. A budget constraint may be represented on a chart according to the following equation:

Pxx + Pyy = m

Px is how much a good costs;

x is the quantity of that good one purchases;

Py is the price of all other goods and services;

y is the quantity of all other goods; and

m is the amount of money one has allocated for consumption.
References in periodicals archive ?
In this study, we show that debt centralization could result in soft budget constraint (SBC) of local governments by building and analyzing a stylized model that might be new to the literature.
This paper investigates how bank capital regulation affects the soft budget constraint problem.
He said, 'The only place in the company that doesn't have a budget constraint is that area, because how would I know how to assess, why would I take my judgment and say you could do this cheaper.
The budget constraint of the government is usually 'soft', meaning that government can relax this constraint when needed.
They did not care enough about how irrelevant some crucial hypotheses such as price flexibility or a balanced budget constraint would become when a team was no longer a profit-maximizing, price-taking entity.
"I think our customers are telling us that we have to help them with their budget constraint problem," said Larry Payne, Cisco vice president of federal sales.
An attempt has been made to maximize the output function of an agency subject to a nonlinear budget constraint by assuming that the agency gets price discounts for purchasing larger quantities of other inputs.
Substituting Equation (4) into Equation (1) yields another budget constraint
Households are endowed with one unit of time which can be devoted to work or leisure, and face the following budget constraint:
Section III presents the formal graphical analysis of these constraints by deriving what we label the regulator's "benefits budget constraint." As its name suggests, the benefits budget constraint defines the locus of maximum benefits the regulator is able to deliver to the affected interest groups.
Possible regulatory outcomes are then studied under alternative assumptions about regulators' preferences regarding banking industry performance and the extent to which deposit insurance and bank examination are integrated activities financed under a consolidated budget constraint. In some cases, regulatory competition leads to efficient policy choices, while in others competition results in inefficient outcomes.
With workflow automation, PDA users can initiate one-click purchasing for orders within a predefined budget constraint or initiate an approval process for large purchases.