Budget Constraint

Also found in: Wikipedia.

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 addition to meeting a binding budget constraint, the consumer must survive: his caloric intake may not fall below some specified minimum.
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.
A firm is said to have a soft budget constraint if a bank allows the firm to continue to operate even when continuation is ex post inefficient.
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.
This is called the budget constraint - you are subjected to it, I am subjected to it, the Government is subjected to it.
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.
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.
1993) recommendation to include substitute and budget constraint reminders in contingent markets.
Without a long-range budget constraint on social security, it will be much more difficult to limit future benefit growth.
Ultimately, the soft budget constraint syndrome is a manifestation of the paternalistic role of the state in the socialist system.