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Budget constraint, the Glossary

In economics, a budget constraint represents all the combinations of goods and services that a consumer may purchase given current prices within their given income.^[1]

42 relations: Arrears, Autarky, Budget, Capital adequacy ratio, Capitalism, Choice modelling, Constraint (mathematics), Consumer, Consumer behaviour, Consumer choice, Consumption–possibility frontier, Contingent valuation, Corner solution, Credit, Economics, Economy, Expansion path, Expense, Factors of production, Guns versus butter model, Heckscher–Ohlin theorem, Indifference curve, Internalization (sociology), International trade, Intertemporal budget constraint, Isoquant, János Kornai, Opportunity cost, Parameter, Paternalism, Present bias, Production–possibility frontier, Scarcity, Subsidy, Sunk cost, Supervision, Syndrome, Tangent, Tax, Trade credit, Trade-off, Utility.
Budgets
Consumer theory
Economics curves

Arrears

In finance, arrears (or arrearage) is a legal term for the part of a debt that is overdue after missing one or more required payments.

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Autarky

Autarky is the characteristic of self-sufficiency, usually applied to societies, communities, states, and their economic systems.

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Budget

A budget is a calculation plan, usually but not always financial, for a defined period, often one year or a month. Budget constraint and budget are budgets.

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Capital adequacy ratio

Capital Adequacy Ratio (CAR) also known as Capital to Risk (Weighted) Assets Ratio (CRAR), is the ratio of a bank's capital to its risk.

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Capitalism

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit.

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Choice modelling

Choice modelling attempts to model the decision process of an individual or segment via revealed preferences or stated preferences made in a particular context or contexts.

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Constraint (mathematics)

In mathematics, a constraint is a condition of an optimization problem that the solution must satisfy.

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A consumer is a person or a group who intends to order, or use purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities.

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Consumer behaviour

Consumer behaviour is the study of individuals, groups, or organisations and all the activities associated with the purchase, use and disposal of goods and services. Budget constraint and Consumer behaviour are consumer theory.

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Consumer choice

The theory of consumer choice is the branch of microeconomics that relates preferences to consumption expenditures and to consumer demand curves. Budget constraint and consumer choice are consumer theory.

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Consumption–possibility frontier

The CPF, or consumption–possibility frontier, is the budget constraint where participants in international trade can consume. Budget constraint and consumption–possibility frontier are economics curves.

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Contingent valuation

Contingent valuation is a survey-based economic technique for the valuation of non-market resources, such as environmental preservation or the impact of externalities like pollution.

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Corner solution

In mathematics and economics, a corner solution is a special solution to an agent's maximization problem in which the quantity of one of the arguments in the maximized function is zero. Budget constraint and corner solution are consumer theory.

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Credit

Credit (from Latin verb credit, meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt), but promises either to repay or return those resources (or other materials of equal value) at a later date.

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Economics

Economics is a social science that studies the production, distribution, and consumption of goods and services.

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Economy

An economy is an area of the production, distribution and trade, as well as consumption of goods and services.

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Expansion path

In economics, an expansion path (also called a scale lineJain, TR; Khanna OP (2008). Economics. VK Publications) is a path connecting optimal input combinations as the scale of production expands. Budget constraint and expansion path are economics curves.

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Expense

An expense is an item requiring an outflow of money, or any form of fortune in general, to another person or group as payment for an item, service, or other category of costs.

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Factors of production

In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services.

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Guns versus butter model

In macroeconomics, the guns versus butter model is an example of a simple production–possibility frontier.

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Heckscher–Ohlin theorem

The Heckscher–Ohlin theorem is one of the four critical theorems of the Heckscher–Ohlin model, developed by Swedish economist Eli Heckscher and Bertil Ohlin (his student).

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Indifference curve

In economics, an indifference curve connects points on a graph representing different quantities of two goods, points between which a consumer is indifferent. Budget constraint and indifference curve are economics curves.

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Internalization (sociology)

In sociology and other social sciences, internalization (or internalisation) means an individual's acceptance of a set of norms and values (established by others) through socialisation.

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International trade

International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services.

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Intertemporal budget constraint

In economics and finance, an intertemporal budget constraint is a constraint faced by a decision maker who is making choices for both the present and the future.

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Isoquant

An isoquant (derived from quantity and the Greek word iso, meaning equal), in microeconomics, is a contour line drawn through the set of points at which the same quantity of output is produced while changing the quantities of two or more inputs. The x and y axis on an isoquant represent two relevant inputs, which are usually a factor of production such as labour, capital, land, or organisation.

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János Kornai

János Kornai (21 January 1928 – 18 October 2021) was a Hungarian economist noted for his analysis and criticism of the command economies of Eastern European communist states.

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Opportunity cost

In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives.

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Parameter

A parameter, generally, is any characteristic that can help in defining or classifying a particular system (meaning an event, project, object, situation, etc.). That is, a parameter is an element of a system that is useful, or critical, when identifying the system, or when evaluating its performance, status, condition, etc.

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Paternalism

Paternalism is action that limits a person's or group's liberty or autonomy and is intended to promote their own good.

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Present bias

Present bias is the tendency to settle for a smaller present reward rather than wait for a larger future reward, in a trade-off situation.

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Production–possibility frontier

In microeconomics, a production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB) is a graphical representation showing all the possible options of output for two goods that can be produced using all factors of production, where the given resources are fully and efficiently utilized per unit time. Budget constraint and production–possibility frontier are economics curves.

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Scarcity

In economics, scarcity "refers to the basic fact of life that there exists only a finite amount of human and nonhuman resources which the best technical knowledge is capable of using to produce only limited maximum amounts of each economic good."Samuelson, P. Anthony., Samuelson, W. (1980).

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Subsidy

A subsidy or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy.

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Sunk cost

In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered.

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Supervision

Supervision is an act or instance of directing, managing, or oversight.

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Syndrome

A syndrome is a set of medical signs and symptoms which are correlated with each other and often associated with a particular disease or disorder.

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Tangent

In geometry, the tangent line (or simply tangent) to a plane curve at a given point is, intuitively, the straight line that "just touches" the curve at that point.

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Tax

A tax is a mandatory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization to collectively fund government spending, public expenditures, or as a way to regulate and reduce negative externalities.

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References

[1] https://en.wikipedia.org/wiki/Budget_constraint

Also known as Individual budget constraint, Resource constraint, Soft budget constraint.

Budget constraint, the Glossary

Table of Contents

See also

Budgets

Consumer theory

Economics curves

References