Basic Economics and Consumer Concepts

This set of vocabulary flashcards covers fundamental economic terms including income types, budgeting concepts, and consumer behavior as described in the provided lecture notes.

Consumer Expenditures

The money spent by a consumer on goods and services, such as Mia using her allowance every Saturday to buy lunch, pay for transportation, and purchase school supplies.

Budget

A plan for how to use a specific amount of money; for example, Janna receives $Ⓡ\,1000$ every week and plans to use $P\,400$ for Food, $300$ for transportation, $P\,200$ for school needs, and $\#\,100$ for Savings.

Budget Constraint

The limit on consumption due to finite funds, such as Ella having only $\$\,800$ and having to choose between a pair of shoes worth $\#\,900$ or a bag worth $500$.

Income

Regular earnings received for work, such as MT Baladad working as a teacher and receiving $\$\,28,000$ every month.

Purchasing Power

The amount of goods or services that can be bought with a set amount of money; for example, Jillian could buy $10\,\text{notebook}$ with $500$ last year but can only buy $8\,\text{notebooks}$ this year due to increased prices.

Personal Income

The total money earned by an individual from all sources, such as Jenny earning money from her salary as a cashier and from renting out a small apartment.

Disposable Income

The amount of money left from a salary after paying taxes, such as Mark having $£\,18,000$ left to pay bills, buy groceries, and save.

Real Income

Income reached after accounting for price changes; for instance, Anna can buy fewer things than before because the prices of foods and transportation increased while her salary stayed the same.

Price

The specific cost of an item, such as a calculator costing $£\,450$ at the bookstore.

Affordability

The state of being able to pay for an item based on current funds, such as a jacket worth $\#\,1,200$ not being affordable for Paul because he only has $700$.

Value of Money

The perceived worth or utility of an item over time relative to its cost, such as Sophia buying a more expensive blater because it lasts for years and keeps drinks cold.

Product Quality

The durability and standard of an item's build, such as a student choosing a durable backpack because it is made from strongs materials and lasts longer.

Alternatives

Different options chosen when a primary choice is too costly, such as a family buying chicken instead of beef when beef prices become too high.

Law of Demand

The principle that lower prices attract more buyers, such as a clothing store offering a $50\%$ discount on t-shirts leading many more customers to buy them.

Purchase Substitute Product

Buying a similar but cheaper product when the original becomes expensive, such as Rachel buying mice matgarine instead of butter.