BUDGET CONSTRAINTS
WHAT IS BUDGET CONSTRAINTS
A budget constraint represents all
the combinations of goods and
services that a consumer can
afford to buy given their income
and the prices of those goods. It's
the limit on a consumer's spending.
Because resources like money are
limited, people can't buy
everything they want, so they have
to make choices. The budget
constraint shows the trade-offs a
consumer faces.
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WHAT IS BUDGET CONSTRAINTS
A budget constraint represents all
the combinations of goods and
services that a consumer can
afford to buy given their income Measures
and the prices of those goods. It's
the limit on a consumer's spending. what you
Because resources like money are
limited, people can't buy can
everything they want, so they have
to make choices. The budget afford to
constraint shows the trade-offs a
consumer faces. buy.
Key Concepts 4
•Income: The total amount of money available to a
consumer for spending. This is the primary factor
that limits a budget.
•Prices: The cost of goods and services. Along with
income, prices determine the purchasing power of a
consumer.
•Trade-off: The concept that to get more of one
thing, you must give up something else. A budget
constraint visually illustrates this. For example, if
you have a limited amount of money for a movie
night, buying a more expensive ticket means you'll
have less money left for popcorn.
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The Budget Line
In economics, a budget
constraint is often visualized
as a budget line on a graph.
This graph typically shows the
quantity of two different goods
that a consumer can
purchase.
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Imagine you have a fixed
budget of $20 to spend on
two items: pizza slices and
soda bottles.
• A slice of pizza costs $2.
• A bottle of soda costs $1.
POSSIBLE COMBINATIONS 10
Option A: You spend all your money on pizza.
• Quantity of Pizza = $20 / $2 = 10 slices
• Quantity of Soda = 0 bottles
Option B: You spend all your money on soda.
• Quantity of Pizza = 0 slices
• Quantity of Soda = $20 / $1 = 20 bottles
Option C: You buy a combination of both.
• You could buy 5 slices of pizza ($2 × 5 = $10) and 10 bottles
of soda ($1 × 10 = $10).
• The total cost is $10 + $10 = $20, which is exactly your budget.
CONSUMER
EQUILIBRIUM
Consumer equilibrium is the
point at which a consumer gets
the maximum possible
satisfaction from their
spending, given their limited
income and the prices of goods
and services. It is a state of
balance where the consumer
has no reason to change their
spending pattern because any
change would lead to a
decrease in their total
satisfaction.
Occurs when the
MU per last dollar
spent is equal
across all goods
consumed (and all
income has spent)
principles:
•Utility Maximization: The consumer's main
goal is to maximize their utility, which is the
satisfaction or happiness they get from
consuming goods.
•Budget Constraint: The consumer has a
fixed income and faces given prices for
goods and services. This means they cannot
buy everything they want and must make
choices.
•Diminishing Marginal Utility: The Law of
Diminishing Marginal Utility states that as
a consumer consumes more and more units of
a specific good, the additional satisfaction
(marginal utility) they get from each extra unit
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Conditions for Equilibrium
1. Single Commodity 16
For a single good, a consumer reaches equilibrium when
the marginal utility derived from the last unit of the good
is equal to its price.
MUx=Px
•MUxis the marginal utility of good X.
•Pxis the price of good X.
If the marginal utility is greater than the price (MUx
>Px), the consumer gets more satisfaction than the cost,
so they will buy more. If the marginal utility is less than
the price (MUx<Px), the consumer is paying more than
the satisfaction they are getting, so they will buy less.
They will adjust their consumption until the two are
2. Multiple Commodities
When a consumer has to choose between two 17 or
more goods, equilibrium is reached when the ratio of the
marginal utility to the price is equal for all the goods
they consume.
Mux/Px=MUy/ Py =⋯=MUM
•MUxand MUyare the marginal utilities of goods X and
Y.
•Pxand Pyare the prices of goods X and Y.
•MUMis the marginal utility of a unit of money.
This is known as the Law of Equi-Marginal Utility. It
means that to maximize satisfaction, a consumer should
allocate their income so that the last dollar spent on each
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Suppose a consumer, Alex, has a budget of
$15 and is choosing between three goods:
• Coffee ☕️: Price (Pc) = $3
• Donuts 🍩: Price (Pd) = $2
• Sandwiches 🥪: Price (Ps) = $5
To find the optimal combination, Alex will
spend his money one dollar at a time, always
choosing the good that provides the highest
marginal utility per dollar (MU/P).
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Units TU TU TU
Coffee Donut Sandwiches
1st 30 24 40
2nd 54 44 75
3rd 72 60 105
4th 84 72 130
5th 90 80 150
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AGENDA
Introduction
Building confidence
Engaging the audience
Visual aids
Final tips & takeaways
THE POWER OF
COMMUNICATION
OVERCOMING
NERVOUSNESS
Confidence-building strategies
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ENGAGING THE AUDIENCE
• Make eye contact with your audience to create a sense of
intimacy and involvement
• Weave relatable stories into your presentation using narratives
that make your message memorable and impactful
• Encourage questions and provide thoughtful responses
to enhance audience participation
• Use live polls or surveys to gather audience opinions, promoting
engagement and making sure the audience feel involved
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SELECTING
VISUAL AIDS
Enhancing your presentation
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EFFECTIVE DELIVERY
TECHNIQUES
This is a powerful tool in Effective body language
public speaking. It enhances your message,
involves varying pitch, making it more impactful
tone, and volume to and memorable.
convey emotion,
• Meaningful eye contact
emphasize points, and
maintain interest. • Purposeful gestures
• Pitch variation • Maintain good posture
• Tone inflection • Control your
expressions
• Volume control
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NAVIGATING Q&A
SESSIONS
1. Maintaining Know your material in advance
composure during the
Anticipate common questions
Q&A session is
essential for projecting Rehearse your responses
confidence and
authority. Consider the
following tips for
staying composed:
2. Stay calm
3. Actively listen
4. Pause and reflect
5. Maintain eye contact
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SPEAKING IMPACT
Your ability to communicate effectively will
leave a lasting impact on your audience
Effectively communicating involves not
only delivering a message but also
resonating with the experiences, values,
and emotions of those listening
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DYNAMIC DELIVERY
Learn to infuse energy Targe Actua
into your delivery to Metric Measurement
t l
leave a lasting Audience
impression # of attendees 150 120
attendance
One of the goals of Engagement
effective Minutes 60 75
duration
communication is to
motivate your audience Q&A interaction # of questions 10 15
Positive feedback Percentage (%) 90 95
Rate of
information Percentage (%) 80 85
retention
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FINAL TIPS & TAKEAWAYS
• Consistent rehearsal • Seek feedback
• Strengthen your familiarity • Reflect on performance
• Refine delivery style • Explore new techniques
• Pacing, tone, and emphasis • Set personal goals
• Timing and transitions • Iterate and adapt
• Aim for seamless, professional delivery
• Practice audience
• Enlist colleagues to listen & provide
feedback
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SPEAKING ENGAGEMENT METRICS
Achiev
Impact factor Measurement Target
ed
Audience interaction Percentage (%) 85 88
Knowledge retention Percentage (%) 75 80
Post-presentation surveys Average rating 4.2 4.5
Referral rate Percentage (%) 10 12
Collaboration opportunities # of opportunities 8 10
THANK
YOU
Brita Tamm
502-555-0152
[email protected]www.firstupconsultants.com
