- Needs are the 5 basics that humans need in order to survive, this includes:
- Needs can vary between cultures and countries, For example, in a developed country, it might be free education, healthcare or quality infrastructure.
- "Wants" are items or things that people desire.
- They are what you would like to have, but they are not essential to day to day living.
-They consist of things such as:
- A new mobile phone
- A bigger house
- A swimming pool in your back garden
- In the developing world, humans always want better food; housing; transport and health services. Although economic resources are limited.
-Wants are infinite and vary between Developed and Developing countries. For example: A person struggling to feed herself (wants food) in the developing world or a millionaire who is seeking to increase their fortunes in the USA.
-Economic wants are desires that can be satisfied by consuming a good, service or leisure activity.
Scarcity & opportunity cost
-Scarcity in an equation is: Unlimited wants + limited resources= Scarcity
-If not everyone can have what they want, then they have to make choices, it raises questions such as:
- This is what is called an Opportunity Cost.
-This is the cost of not choosing the next best alternative- What you give up when making the choice.