A budget constraint represents the limit on the consumption choices of an individual or household based on their income and the prices of goods and services. It illustrates the trade-offs that consumers face when deciding how to allocate their limited resources among various options. The budget constraint can be visualized as a line on a graph, where one axis represents one good, and the other axis represents another good. When consumers make choices within their budget constraint, they aim to maximize their satisfaction or utility. If the price of a good changes, the budget constraint shifts, affecting the combination of goods that can be purchased. Understanding the budget constraint helps in analyzing consumer behavior and decision-making in economics.