THE BUDGET CONSTRAINT: WHAT THECONS

THE BUDGET CONSTRAINT: WHAT THE
CONSUMER CAN AFFORD
• The budget constraint depicts the limit on the
consumption “bundles” that a consumer can
afford.
– People consume less than they desire because
their spending is constrained, or limited, by their
income.
THE BUDGET CONSTRAINT: WHAT THE
CONSUMER CAN AFFORD
• The budget constraint shows the various
combinations of goods the consumer can
afford given his or her income and the prices
of the two goods.

As people have a limited amount of budget or resource, they face the trade-off. For
example, each person has a limited amount of income or money, therefore, he or she cannot buy
everything he or she wants. To increase spending in one good or service, that person has to
reduce expenditure of another good or more. Table 6.1 presents different quantity of
consumption of two goods in the same amount of budget.
Budget Constraint or Budget Line
Budget Constraint or Budget Line presents the limit on the consumption bundles that a
consumer can afford. (Mankiw, 2012)
Table 1: Example of Various Consumption Bundles of Goods that a Consumer Can Buy
Bowls of
Noodles
Bottles of
Orange Juice
Spending on
Noodles (baht)
Spending on
Orange Juice
(baht)
Total Spending
(baht)
25 0 1,000 0 1,000
24 4 960 40 1,000
23 8 920 80 1,000
22 12 880 120 1,000
21 16 840 160 1,000
20 20 800 200 1,000
19 24 760 240 1,000
18 28 720 280 1,000
17 32 680 320 1,000
16 36 640 360 1,000
15 40 600 400 1,000
14 44 560 440 1,000
13 48 520 480 1,000
12 52 480 520 1,000
11 56 440 560 1,000
10 60 400 600 1,000
9 64 360 640 1,000
8 68 320 680 1,000
7 72 280 720 1,000
6 76 240 760 1,000
5 80 200 800 1,000
4 84 160 840 1,000
3 88 120 880 1,000
2 92 80 920 1,000
1 96 40 960 1,000
0 100 0 1,000 1,000
Table 6.1 shows budget constraint because the increase of consumption of one good
reduces consumption of the other good. Suppose that a bowl of noodle costs 40 baht and one
glass of orange juice is priced 10 baht. Assume further that the person has a limited amount of
budget at 1,000 baht and buys two goods, noodles and orange juice. We can see that if that
person chooses to buy more bowls of noodles, he has smaller amount of budget to buy orange
juice. If this person prefers orange juice, he must decrease budget spending for noodles, too.
With the data from Table 6.1, we can construct a budget line or budget constraint as in Figure
6.1.
Figure 6.1: A Consumer’s Budget Constraint or Budget Line
Figure 6.1 illustrates bundles of noodles and orange juice that this consumer can buy with
the limitation of the budget at 1,000 baht. If that person likes to consume only noodles, he would
spend the budget only on noodles. From the Figure 6.1, he chooses point A, indicating that he
consume 25 bowls of noodles and does not buy orange juice. If this person likes only orange
juice, he would choose point B, indicating that he consumes 100 bottles of orange juice and do
not spend for noodles. However, each consumer chooses to spend budget on more than one good.
Point C seems to be the best in depicting consumer behavior in reality. From the figure, this
person buys 12 bowls of noodles and 52 bottles of orange juice. In sum, the slope of the budget
constraint shows the trade-off between noodles and orange juice that that consumer faces.
6.2.2 Consumer Preference: Utility
While a budget constraint or budget line reflects the limited amount of resources that a
consumer has to spend for maximizing preference or satisfaction. In economics, we measure the
amount of satisfaction received “utility”. The unit used for measuring utility is ‘util’. For a
consumer, it is hard to count his satisfaction. For example, 10 utils of one person is possibly
different from 10 utils of another person. Therefore, modern economists make the utility can be
arranged in order. Indifference Curve (IC) illustrates the bundles of consumption that makes one
consumer equally happy. Figure 6.2 illustrates IC curve of a person.
Figure 6.2: A Consumer’s Indifference Curve Represen


จ้านวนนักท่องเที่ยวต่างชาติ ขยายตัวสูงสุดในรอบ 26 เดือน ตามจ้านวนนักท่องเที่ยวจากเอเชีย
ที่เพิ่มขึ้น โดยเฉพาะจีนและมาเลเซีย จากปัจจัยฤดูกาลในช่วงเทศกาลตรุษจีน
อัตราการเข้าพักโรงแรม อยู่ที่ 71.9% เร่งตัวขึ้นจาก 67.3% สอดคล้องกับจ้านวนนักท่องเที่ยวที่
เพิ่มขึ้น โดยเฉพาะจีนและมาเลเซียในช่วงเทศกาลตรุษจีน แต่นักท่องเที่ยวจากตลาดหลักอื่น ๆ อาทิ
ยุโรป รัสเซีย และญี่ปุ่น ยังได้รับผลกระทบจากการชะลอตัวของเศรษฐกิจในแต่ละประเทศ

ผลลัพธ์ (อังกฤษ) 1:

THE BUDGET CONSTRAINT: WHAT THECONSUMER CAN AFFORD• The budget constraint depicts the limit on theconsumption "bundles" that a consumer canafford.– People consume less than they desire becausetheir spending is constrained, or limited, by theirincome.THE BUDGET CONSTRAINT: WHAT THECONSUMER CAN AFFORD• The budget constraint shows the variouscombinations of goods the consumer canafford given his or her income and the pricesof the two goods.As people have a limited amount of budget or resource, they face the trade-off. Forexample, each person has a limited amount of income or money, therefore, he or she cannot buyeverything he or she wants. To increase spending in one good or service, that person has toreduce expenditure of another good or more. Table 6.1 presents different quantity ofconsumption of two goods in the same amount of budget. Budget Constraint or Budget LineBudget Constraint or Budget Line presents the limit on the consumption bundles that aconsumer can afford. (Mankiw, 2012)Table 1: Example of Various Consumption Bundles of Goods that a Consumer Can BuyBowls ofNoodlesBottles ofOrange JuiceSpending onNoodles (baht)Spending onOrange Juice(baht)Total Spending(baht)25 00 1000 00 100024 4 960 40 100023 8 920 80 100022 12 880 120 100021 16 840 160 100020 20 800 200 100019 24 760 240 100018 28 720 280 100017 32 680 320 100016 36 640 360 100015 40 600 400 100014 44 560 440 100013 48 520 480 100012 52 480 520 100011 56 440 560 100010 60 400 600 10009 64 360 640 10008 68 320 680 10007 72 280 720 10006 76 240 760 10005 80 200 800 10004 84 160 840 10003 88 120 880 10002 92 80 920 10001 96 40 960 100000 100 00 1000 1000Table 6.1 shows budget constraint because the increase of consumption of one goodreduces consumption of the other good. Suppose that a bowl of noodle costs 40 baht and oneglass of orange juice is priced 10 baht. Assume further that the person has a limited amount ofbudget at 1,000 baht and buys two goods, noodles and orange juice. We can see that if that person chooses to buy more bowls of noodles, he has smaller amount of budget to buy orangejuice. If this person prefers orange juice, he must decrease budget spending for noodles, too.With the data from Table 6.1, we can construct a budget line or budget constraint as in Figure6.1.Figure 6.1: A Consumer's Budget Constraint or Budget LineFigure 6.1 illustrates bundles of noodles and orange juice that this consumer can buy withthe limitation of the budget at 1,000 baht. If that person likes to consume only noodles, he wouldspend the budget only on noodles. From the Figure 6.1, he chooses point A, indicating that heconsume 25 bowls of noodles and does not buy orange juice. If this person likes only orangejuice, he would choose point B, indicating that he consumes 100 bottles of orange juice and donot spend for noodles. However, each consumer chooses to spend budget on more than one good.Point C seems to be the best in depicting consumer behavior in reality. From the figure, thisperson buys 12 bowls of noodles and 52 bottles of orange juice. In sum, the slope of the budgetconstraint shows the trade-off between noodles and orange juice that that consumer faces.6.2.2 Consumer Preference: UtilityWhile a budget constraint or budget line reflects the limited amount of resources that aconsumer has to spend for maximizing preference or satisfaction. In economics, we measure the amount of satisfaction received "utility". The unit used for measuring utility is 'util'. For aconsumer, it is hard to count his satisfaction. For example, 10 utils of one person is possiblydifferent from 10 utils of another person. Therefore, modern economists make the utility can bearranged in order. Indifference Curve (IC) illustrates the bundles of consumption that makes oneconsumer equally happy. Figure 6.2 illustrates IC curve of a person.Figure 6.2: A Consumer's Indifference Curve RepresenSpice loop for foreign tourists. The highest growth in the past 26 months, according to the Spice cycle tourists from Asia.The rise of China and Malaysia, especially those from seasonal factors, during the Chinese new year Festival.The rate stood at 71.9% for hotel stays up from 67.3% acceleration in accordance with the Spice cycle tourists.China and Malaysia increased, especially during the Chinese new year Festival, but tourists from other markets such as.Europe, Russia, and Japan Also affected by the slowdown of the economy in each country.

ผลลัพธ์ (อังกฤษ) 2:

THE BUDGET constraint: WHAT THE
CONSUMER CAN afford
• The Budget constraint depicts the Limit on the
consumption "bundles" that a Consumer Can
afford.
- People Consume less than they Desire because
their spending is constrained, or Limited, by their
income.
THE BUDGET. constraint: WHAT THE
CONSUMER CAN afford
• The Budget constraint shows the Various
combinations of the Consumer Goods Can
afford or Her Given his income and the prices
of the Goods Two. As people have a Limited Resource or amount of Budget, they Face the TRADE-. off. For example, each person has a Limited amount of income or Money, therefore, He or She Can not buy everything He or She wants. To increase spending in one good or Service, that person has to Reduce expenditure of another good or more. Table 6.1 Presents different Quantity of consumption of Two Goods in the Same amount of Budget. Budget Constraint or Budget Line Budget Constraint or Budget Line Presents the Limit on the consumption bundles that a Consumer Can afford. (Mankiw, 2012th) Table 1: Example of. Various Consumption Bundles of Goods that a Consumer Can Buy Bowls of Noodles Bottles of Orange Juice Spending on Noodles (Baht) Spending on Orange Juice (Baht) Total Spending (Baht) 25 0 1,000 0 1,000 24 4 960 40 1,000 23 8 920 80 1,000. 22 12,880,120 1000 21 16,840,160 1000 20 20,800,200 1000 19 24,760,240 1000 18 28,720,280 1000 17 32,680,320 1000 16 36,640,360 1000 15 40,600,400 1000 14 44,560,440 1000 13 48,520,480 1000. 12 52,480,520 1000 11 56,440,560 1000 10 60,400,600 1000 9 64,360,640 1000 8 68,320,680 1000 7 72,280,720 1000 6 76240760 1000 5 80,200,800 1000 4 84160840 1000 3 88120880 1000. 2 92 80 920 1,000 1 96 40 960 1,000 0 100 0 1,000 1,000 Table 6.1 shows Budget constraint because the increase of consumption of one good Reduces consumption of the Other good. Suppose that a Bowl of Noodle costs 40 Baht and one Glass of Orange Juice. is priced 10 Baht. Assume further that the person has a Limited amount of Budget at 1,000 Baht and Buys Two Goods, Noodles and Orange Juice. We Can See that if that person Chooses to buy more Bowls of Noodles, He has smaller amount of Budget. to buy Orange Juice. If this person Prefers Orange Juice, He must decrease Budget spending for Noodles, Too. With the Data from Table 6.1, we Can Construct a Budget line or Budget constraint as in Figure 6.1. Figure 6.1: A Consumer's Budget Constraint. or Budget Line Figure 6.1 Illustrates bundles of Noodles and Orange Juice that this Consumer Can buy with the Limitation of the Budget at 1,000 Baht. If that person likes to Consume only Noodles, He would Spend the Budget only on Noodles. From the Figure 6.1,. He Chooses Point A, Indicating that He Consume 25 Bowls of Noodles and does not buy Orange Juice. If this person only likes Orange Juice, He would choose Point B, Indicating that He consumes 100 bottles of Orange Juice and do not Spend for Noodles. however, each Consumer Chooses to Spend Budget on more than one good. Point C seems to be the Best in depicting Consumer behavior in Reality. From the figure, this person Buys 12 Bowls of Noodles and 52 bottles of Orange Juice. In Sum, the. Slope of the Budget constraint shows the Trade-off between Noodles and Orange Juice that faces that Consumer. 6.2.2 Consumer Preference: Utility While a Budget or Budget constraint line Reflects the amount of Limited Resources that a Consumer has to Spend or for maximizing Preference. satisfaction. In economics, we measure the amount of satisfaction received "Utility". The UNIT used for measuring Utility is 'util'. For a Consumer, it is hard to Count his satisfaction. For example, 10 utils of one person is possibly different. from 10 utils of another person. Therefore, Modern economists Make the Utility Can be arranged in Order. Indifference Curve (IC) Illustrates the bundles of consumption that Makes one Consumer equally Happy. Figure 6.2 Illustrates IC Curve of a person. Figure 6.2: A. Consumer's Indifference Curve Represen The number of foreign tourists. Rose the most in 26 months, according to The number of tourists from Asia increased. In particular, China and Malaysia By seasonal factors during the Spring Festival hotels occupancy rate is at 71.9%, up from 67.3%, in line with The number of tourists increased. In particular, China and Malaysia during the Chinese New Year. But travelers from other major markets such as Europe, Russia and Japan are also affected by the slowdown of the economy in each country.

ผลลัพธ์ (อังกฤษ) 3:

THE BUDGET CONSTRAINT: WHAT THE
CONSUMER CAN AFFORD
- The budget constraint depicts the limit on the
consumption "bundles." That a consumer can
.
- afford People consume less than they desire because
their spending is constrained or limited by,,, Their
.
income THE BUDGET CONSTRAINT: WHAT THE
CONSUMER CAN AFFORD
- The budget constraint shows the various
combinations. Of goods the consumer can
.Afford given his or her income and the prices
of the two goods.

As people have a limited amount of budget, or resource. They face the trade-off. For
example each person, has a limited amount of income, or money therefore he or, she cannot buy
everything. He or she wants. To increase spending in one good, or service that person has to
reduce expenditure of another good or, more. Table 6.1 presents different quantity of
consumption of two goods in the same amount of budget.
Budget Constraint or Budget Line
Budget. Constraint or Budget Line presents the limit on the consumption bundles that a
consumer can afford. (Mankiw 2012)
Table,, 1: Example of Various Consumption Bundles of Goods that a Consumer Can Buy


Bowls of Noodles Bottles of

Orange Juice Spending. On
Noodles (baht)
.Spending on
Orange Juice
(baht)
Total Spending
(baht)
25 0 1 000, 0, 1 000
24 4 960, 40 1 000
23 8 920, 80 1 000
22 12 880, 120 1 000
21 16 840, 160 1 000
20 20 800 200 1 000
19, 24 760, 240 1 000
18 28 720, 280 1 000
17 32 680, 320 1 000
16 36 640, 360 1 000
15 40 600, 400 1 000
14 44 560, 440 1 000
13 48 520, 480 1 000
12 52 480 520 1 000
11, 56 440, 560 1 000
10 60 400, 600 1 000
9 64 360, 640 1 000
.8 68 320, 680 1 000
7 72 280, 720 1 000
6 76 240, 760 1 000
5 80 200, 800 1 000
4 84 160, 840 1 000
3 88 120, 880 1 000
2 92 80, 920 1 000
1 96 40, 960 1 000
0 100 0 1 000 1, 000
Table, 6.1 shows. Budget constraint because the increase of consumption of one good
reduces consumption of the other good. Suppose that a. Bowl of noodle costs 40 baht and one
glass of orange juice is priced 10 baht.Assume further that the person has a limited amount of
budget, at 1 000 baht and buys, two goods noodles and orange juice.? We can see that if that
person chooses to buy more bowls of noodles he has, smaller amount of budget to buy orange
juice.? If this person prefers orange juice he must, decrease budget spending, for noodles too.
With the data from, Table 6.1We can construct a budget line or budget constraint as in Figure
.
6.1 Figure 6.1: A Consumer 's Budget Constraint or Budget. Line
Figure 6.1 illustrates bundles of noodles and orange juice that this consumer can buy with
the limitation of the budget. At, 1 000 baht. If that person likes to consume, only noodles he would
spend the budget only on noodles. From the, Figure 6.1 he. Chooses, point AIndicating that he
consume 25 bowls of noodles and does not buy orange juice. If this person likes only orange
juice he,, Would choose point B indicating that, he consumes 100 bottles of orange juice and do
not spend for noodles. However each,, Consumer chooses to spend budget on more than one good.
Point C seems to be the best in depicting consumer behavior in, reality. From, the figure this
.Person buys 12 bowls of noodles and 52 bottles of orange juice. In sum the slope, of the budget
constraint shows the trade-off. Between noodles and orange juice that that consumer faces.
6.2.2 Consumer Preference: Utility
While a budget constraint. Or budget line reflects the limited amount of resources that a
consumer has to spend for maximizing preference or, satisfaction. In, economicsWe measure the
amount of satisfaction received "utility". The unit used for measuring utility is' util '. For a
consumer,, It is hard to count his satisfaction. For example 10 utils, of one person is possibly
different from 10 utils of another. Person. Therefore modern economists, make the utility can be
arranged in order.Indifference Curve (IC) illustrates the bundles of consumption that makes one
consumer equally happy. Figure 6.2 illustrates. IC curve of a person.
Figure 6.2: A Consumer 's Indifference Curve Represen


Zhan of foreign tourists around the maximum expansion in 26 months. According to Zhan of tourist from Asia
.Increases, especially in China and Malaysia. From seasonal factors during Chinese New Year
hotel occupancy rate in the 71.9% upwards from the 67.3% consistent with Zhan of tourists
.Increased, especially in China and Malaysia during Chinese New Year. But tourists from other major markets such as Europe, Russia and Japan, also affected by the economic slowdown in each country
.