A budget constraint represents the various combinations of goods and services a consumer can purchase given their income and the prices of goods and services. It forms a crucial element in consumer choice theory within economics, illustrating the trade-offs consumers face as they allocate their limited resources among competing needs and wants.
In a graphical diagram illustrating relative consumption, the substitution slope represents the relationship of the substitution of any pair of goods with respect to one another at different prices out of a given income.
