What Is An Economics.Economics examines how people satisfy their unlimited wants and needs for goods and services with limited resources. More specifically, economics is the study of a process that involves choice making as people try to get the most satisfaction possible when they buy goods and services. The place where this choice-making process occurs is called the economy. If you are like most people, you cannot buy all the goods and services you would like. Therefore, you must make choices. Most individuals and all nations are faced with the problem of making these choices.
What Is An Economics;Facts You Must Know About Economic Principle.
Economics Goods And Services.
An economic good is any material (tangible) object that people use to satisfy their wants or needs. The object must be scarce enough that people are willing to pay money for it. Almost everything you own is an economic good; for example, the clothes that you are wearing or the breakfast that you had this morning are economic goods. The medical advice of a doctor, the winning run produced by a professional baseball player, and the ride provided by a taxi driver are not material objects, but they do satisfy wants or needs. These activities are classified as economic services. An economic service is any intangible product that to satisfy their wants or needs.
Economics Wants And Need.
Economic wants are the goods and services we buy for pleasure or comfort, such as cosmetics, sports equipment, and designer clothes. We may want many other intangible things, such as the love and affection of our family, the respect and admiration of our friends, and recognition for our achievements. These cannot be valued in terms of money, however, and therefore they are not economic wants. Economic needs are such basics as food, clothing, and shelter. The distinction between economic needs and economic wants is sometimes difficult to make.
What might be considered a want by one person could be considered a need by another. A car might represent a need for your parents who depend upon it for transportation to work. Your desire for a car is probably a want considering the other sources of transportation available to you. Your wants usually change over a period of time. These changes might be the result of getting older, increased education, increased income, or a change in the place where you live. There are many sides to even your most basic needs and wants. For example, if you are hungry, you will eat almost anything. At other times, you are more selective about the food you eat.
How People Satisfy Economic Wants and Needs Most people obtain money by working.
This money is then used to buy goods and services to satisfy needs and wants. Sometimes people do not spend all the money they earn, but save some to buy things they want or need at a later date. Some people do not have to work because they already have enough money to satisfy their economic wants and needs. Most of us, however, need the money we earn from our work to buy goods and services. Naturally, we want our work to be enjoyable and to provide satisfaction as well as money. Opportunity Costs Individuals are constantly making choices among the things they want. For example, you may want to go to a movie and you may want to go bowling. Assume that you only have enough money available at the time to do one or the other.
You must decide which way you are going to spend your money. The real or opportunity cost of what you choose is the value of your next best alternative or what you give up when you make your decision. In this case, the opportunity cost of going bowling is not going to the movie. The opportunity cost of going to the movie is not going bowling. Even if there were no monetary cost for the movie or for bowling, there would still be an opportunity cost since you cannot do both at the same time.