Unlimited Wants & Needs
• Humans have many different types of
wants and needs. Economics looks only at
man’s material wants and needs. These
are satisfied by consuming (using) either
goods (Physical items such as food) or
services (non-physical items such as
Why Wants and Needs are virtually
• Goods eventually wear out and need to be
• New or improved products become
• People get fed up with what they already
• Definition: Psychological desires that are
not essential, that make life just a little
• Private Wants: New Bike, A Car, Money
• Public Wants: New Highways, National
Defense, and Education
• Needs are best thought of as physiological
or biological requirement maintaining life,
such as the need for air, water, food,
shelter, and sleep, and clothing.
• The process of fulfilling wants and need,
whether or not a good is wanted or
needed to be satisfied.
– Chris goes into a department store and
notices a shirt he likes, Chris then buys the
shirt. Chris does not have a desire for that
shirt anymore because he has been satisfied
until he finds something else he might like to
• A huge number of unsatisfied wants and needs
is important because it provides people with
motivation to take action. A person being hungry
during the meal times would get something eat.
• For economics, the act of satisfying wants and
needs is extemeley important because it
“Motivates” people to take action, to buy goods,
to work, and to consume.
• Limited Production
– There are not enough resources to produce everything that
• Forgone Alternatives
– The same resources cannot be used to produce two different
goods at the same time.
– Some People must do without some of the goods and services
that are wanted and needed.
• Opportunity Cost
– Doing one thing, producing one good, performing one means
other things cannot be done, other goods cannot be produced
and activities cannot be performed.
• How to Make Decisions
– The Cost of Choosing
• Opportunity Cost
• Values and Goals
– Decision Making Process
• Identify the problem
• List alternatives
• Make the best choice
• Carry out on what you have decided to do
• Evaluate your decision
• Managing Your Money
– Steps in Planning a Budget
• Set Goals
– Make sure they are realistic! Give yourself plenty of time to reach them,
but not too much time that you put them off.
• Estimate Income
– Generally, using 2/3 of your Gross Pay is a safe way for estimating
your income. This will give a balance a little lower then actual, but this
helps over budgeting.
• Plan for Saving
– It’s a good idea to put some money aside into a saving account.
Having money saved is good because when something unexpected
happens, you have some extra money if you need it.
• Balance & Adjust the Budget
– If your total estimated expenses are higher then your total estimated
income, you need to adjust your budget. Either you can cut some of
your expenses, or increase your income. This can be the hardest step
to work with.
• People always want and need more then what they
have. Throughout history, there is no documented case
of anyone ever becoming fully, completely, and
absolutely satisfied. Unlimited wants and needs don’t
just motivate ordinary activities. They are ultimately
responsible for motivating people to find employment,
seek education, run for political office, explore new
worlds, and just about everything people do in today’s
society. 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
• Introductory Revision Notes: Basic Economic
• AmosWEB GLOSS*Arama Unlimited wants and
• Unlimited Wants