1 10.10

Question 1

what is a discretionary income

Answer 1

income leftover after taxes, benefits, essential bills have been paid

Question 2

what is a disposable income

Answer 2

income left over after taxes (and benefits)

Question 3

what is a substitute good

Answer 3

goods that are consumed instead of each other

Question 4

what is a complementary good

Answer 4

goods that are consumed together

Question 5

what is supply

Answer 5

the quantity of a good or service that producers are able and willing to sell at a given price and in a given time

Question 6

what is demand

Answer 6

the quantity of a good or a service that consumers are able and willing to buy at a given price in a given time period

Question 7

what is the law of demand

Answer 7

as the price of a product falls the quantity demanded of the product will expand, ceteris paribus (inverse relationship)

Question 8

what is the law of supply

Answer 8

as the price of a product rises the quantity supplied will expand, ceteris paribus (direct relationship)

Question 9

what is equilibrium

Answer 9

a state of balance between market demand and supply - there is no excess demand or supply.

Question 10

what happens when there is excess supply in an economy

Answer 10

there will be a downwards pressure on price

Question 11

what happens when there is excess demand in an economy

Answer 11

there will be an upwards pressure on price

Question 12

what is the equation for total revenue

Answer 12

market price x quantity sold