Chapter 2 - Household Expenditure

Question 1

Define expenditure.

Answer 1

The amount of money we spend during a particular period.

Question 2

Define fixed expenditure.

Answer 2

Money spent on a regular basis, the amount of which does not depend on how often we use the item e.g. mortgage/rent.

Question 3

Define irregular expenditure.

Answer 3

Money spent on a regular basis, the amount of which does vary and depends on the amount of the item we use e.g. electricity bill.

Question 4

Define discretionary expenditure.

Answer 4

Money spent on items that we should buy only if we have money left over after we have set aside enough money to pay all our important bills e.g. holiday.

Question 5

Define impulse buying.

Answer 5

Buying something on the spur of the moment without thinking about the consequences.

Question 6

Define opportunity cost.

Answer 6

The item we have to do without or the opportunity we had to forgo in order to buy something else.
e.g. We have €20. There is a blue dress costing €20 and a red dress costing €20. We buy the red dress. The blue dress is the opportunity cost.

Question 7

Define financial cost.

Answer 7

The price one pays for a good or service.

Question 8

Define mortgage.

Answer 8

A loan from a bank or building society to help someone to buy a house.