The first cash advance constraint is an idea used in economic modelling to demonstrate how equilibrium affects purchases. This is sometimes used to demonstrate Pareto efficiencies. In the simplest possible terms, it is a description of how "cash-in-advance" limits the absolute spending power of a business.Cash in advance is a term describing terms of purchase, when full payment for a good or service is due before the merchandise is shipped. This presents the least risk to a seller while having the most risk to the buyer. It is often combined with other terms such as Free On Board, which require the buyer to take possession of the merchandise as soon as it is loaded onto transportation, meaning the buyer is out of luck if something happens to the shipment en route. In actual daily business...