Wants and Needs

Welcome to Economics!  Much of what you learn in this class is already familiar to you.  Economics deals with how society and individuals get the most out of their resources.  When you borrow money to buy a new car, that is economic activity.  If you earn money working in a job, that is also economics.   People who set up businesses, governments that plan budgets, and even children saving money in a piggy bank are all engaging in economic activity.

Everyone has wants and needs.  Our economic wants are satisfied by consuming goods, services, or leisure activities, such as video games.  But human wants are unlimited. Whether it is a person struggling to feed herself in the developing world, or a millionaire seeking to increase her fortune in the USA, there is always something more an individual wants. Human beings want better food; housing, transport and health services.

But economic resources are limited. People have to make choices because they cannot have everything they want – having more of one thing normally means having less of something else. The development of society can be described as the emergence of new wants and needs - which producers attempt to supply by using the available factors of production.