Demand and Supply

Definitions of words associated with Demand and Supply.

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Define Demand.
refers to the willingness and ability of someone to pay for a good or a service at a given price.
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What is a subsitute good? Give an example.
Goods and services that can be used instead of one another. E.g Coca cola and Pepsi.
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What are complimentary goods? Give an example.
goods and services that need to be used together to produce the desired effect. E.g DVDs and DVD players
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What is real income?
The amount of money that you earn, such as your salary, after having been adjusted for inflation.
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What is disposable income?
The amount of money that is kept after your taxes are paid.
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What is discretionary income?
The amount of money that is left after you have paid your mortgages and loans – in essence this is the money that is left for you to spend as you wish
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What causes movement along the curve?
If there is a change in the price of goods or services than there will be movement along the demand curve for that good or service: Remember that whenever there is an increase in price then there will also be a decrease in quantity demanded and vice
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What causes a shift of the curve?
If there is a change in the price of goods or services than there will be movement along the demand curve for that good or service: Remember that whenever there is an increase in price then there will also be a decrease in quantity demanded and vice
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Other cards in this set

Card 2

Front

Goods and services that can be used instead of one another. E.g Coca cola and Pepsi.

Back

What is a subsitute good? Give an example.

Card 3

Front

goods and services that need to be used together to produce the desired effect. E.g DVDs and DVD players

Back

Preview of the back of card 3

Card 4

Front

The amount of money that you earn, such as your salary, after having been adjusted for inflation.

Back

Preview of the back of card 4

Card 5

Front

The amount of money that is kept after your taxes are paid.

Back

Preview of the back of card 5
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