Economics, 3rd Edition

budget constraint 

the limit on the consumption bundles that a consumer can afford

The consumer can afford to buy any combination inside the budget constraint, in this example, point D 

shows a combination of 270 litres of cola and 15 pizzas. Point E is outside the budget constraint. No points 

outside the budget constraint are possible – the consumer does not have the income to be able to afford 

any combination of pizza and cola to the right of the budget constraint. Of course, these are only four of 

The graph of this data is given in Figure 5.1. The line connecting points A to B is called the