Limited resources to meet unlimited wants need not be a problem

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limited resources to meet unlimited wants need not be a problem

Explain how people's wants exceed their limited resources and that this condition defines scarcity. • Know that scarcity requires individuals to make choices and that these choices function of the economy is to allocate scarce resources among unlimited wants. Any resources that are not scarce are called FREE GOODS. resources are limited before also stating that wants are unlimited [see pp. All three pairs of authors are alike in that the question of poverty is relegated to the back . unwise choices, it is not necessary to differentiate needs from wants unless. The economic problem – sometimes called basic or central economic problem – asserts that an economy's finite resources are insufficient to satisfy all human wants and needs. It assumes that human wants are unlimited, but the means to satisfy human wants are limited . It supposes that the scarce resources are not fully utilized in a capitalistic.

Wants are then the psychological desires that are not essential for life but that make life just a little more enjoyable. Now, consider the process of fulfilling wants and needs.

limited resources to meet unlimited wants need not be a problem

Satisfaction is the process of successfully fulfilling wants and needs. Whether a good is wanted or needed, it provides satisfaction. Consider the simple process of consuming a hot fudge sundae: Duncan Thurly has a craving for a hot fudge sundae. Duncan eats a hot fudge sundae.

limited resources to meet unlimited wants need not be a problem

Duncan no longer craves a hot fudge sundae. Duncan has been satisfied, at least as far as his hot fudge sundae desire is concerned. Motivation The vast number of unsatisfied wants and needs is important because it provides people with the motivation to take action.

Being hungry in the morning motivates Duncan to whip up some pancakes and sausage. Being hungry before bedtime motivates Duncan to seek out chocolate chip cookies.

What are unlimited wants? Definition and examples - Market Business News

Similar motivations exist for lunch and dinner. Duncan buys a car because he needs to travel, Duncan buys a can-opener because he needs to open cans, Duncan buys clothing because he needs protection from the weather and does not want to hear people snicker when he passes by wearing nothing but sandals and a baseball cap. For economics, the pursuit of satisfaction, the act of satisfying wants and needs, is extremely important.

limited resources to meet unlimited wants need not be a problem

It motivates people to take action, to buy goods, to work, to produce, to consume. Duncan is motivated to buy a hot fudge sundae because he wants a hot fudge sundae. However, because wants and needs are unlimited, so too is his motivation to take action.

People always want and need more than they have. Throughout history, there is no documented case of anyone ever becoming fully, completely, and absolutely satisfied.

Once Duncan eats a hot fudge sundae, then he needs stomach-settling antacid. Once he owns a red sports car, then he needs gasoline There is always something else that he wants or needs.

Nature of economics (limited resources and unlimited want)

Unlimited wants and needs do not just motivate mundane activities such as these. They are ultimately responsible for motivating people to find employmentseek education, run for political office, explore new worlds, and well In fact, without unsatisfied wants and needs no one would ever do anything.

No one would do anything because no one would NEED to do anything. Why bother doing anything when wants and needs are already satisfied.

Economic problem - Wikipedia

In other words, more production of a desired commodity can be made possible only by reducing the quantity of resources used in the production of other goods. The problem of allocation deals with the question of whether to produce capital goods or consumer goods. If the community decides to produce capital goods, resources must be withdrawn from the production of consumer goods.

In the long run, however, investment in capital goods augments the production of consumer goods. Thus, both capital and consumer goods are important.

Economic problem

The problem is determining the optimal production ratio between the two. Resources are scarce and it is important to use them as efficiently as possible. Thus, it is essential to know if the production and distribution of national product made by an economy is maximally efficient. The production becomes efficient only if the productive resources are utilized in such a way that any reallocation does not produce more of one good without reducing the output of any other good.

In other words, efficient distribution means that redistributing goods cannot make anyone better off without making someone else worse off.

The inefficiencies of production and distribution exist in all types of economies.

The welfare of the people can be increased if these inefficiencies are ruled out. Some cost must be incurred to remove these inefficiencies.

If the cost of removing these inefficiencies of production and distribution is more than the gain, then it is not worthwhile to remove them. The problem of full-employment of resources[ edit ] In view of the scarce resources, the question of whether all available resources are fully utilized is an important one.

A community should achieve maximum satisfaction by using the scarce resources in the best possible manner—not wasting resources or using them inefficiently. There are two types of employment of resources: Labour-intensive Capital-intensive In capitalist economies, however, available resources are not fully used.

In times of depression, many people want to work but can't find employment.