Examples Of Budget Constraint

Introduction: Consumers need so many goods and services, but the budget is, however, limited. In such limitations, consumers often learn to improvise and make sure they consume within their budget constraint. This essay has laid out a time the author was indifferent between two goods, what the goods were and what made him indifferent between the two goods. Additionally, this essay explores a time there was a change in the author’s budget for two goods, what the goods were, and how the change affects his consumption choices. Finally, the essay examines the time the author applied the utility maximization rule, what the goods and services were, and how the process relates to the author’s budget constraint.
Name a time you were indifferent between

A budget constraint is “a restriction that total spending cannot exceed the budget available” (Rittenberg & Tregarthen, 2012, p. 289). As a consumer, my income is limited; therefore, with the number of items I collected, I had already exceeded my budget so I applied the budget constraint rule by adjusting and reducing the items. However, the marginal utility per dollar I spent on the designer shirt equal the satisfaction the pair of shoe would have given me. From what a budget constraint is, I was able to buy the items I needed within the budget (OpenStax, 2014). This is how the goods I choose to maximize my utility relate to my budget

In my case, Pepsi Cola and Coca-Cola gave me equal satisfaction and utility. There are several times I had a change in budget for two goods. Most times, the prices of goods skyrocketed and I often had to adjust my budget to meet the demand. Furthermore, consciously or unconsciously, I have applied the utility maximization rule. I applied it when I bought a double-breasted suit, a designer shirt, and a perfume; dropping the shoe instead. I was able to relate to my budget constraint by ensuring that I did not go over my budget while still maximizing my