August 21, 2014

Need and Want: The Evolution of the Economy


Economic observers would agree that human evolution was greatly influenced by increasing wants. The basic need was always needed, the wants were the one who changed dramatically and significantly influenced the growth and development of an economy. The concept of need and want is very important to be understood by the economic observers because this drives the supply and demand in an economy.

Economics can be defined as the management limited resources of the world for growing needs and unlimited wants of the human beings. History would proved that in the past, the focus of economics is how to manage the needs of the people. Well, there was no need for too much economics that time because resources is greater that human needs. Then the word “want” was invented – and everything changed. Suddenly, people just waked up thinking that what they have is not enough, and that they want something that will make life different. It's like you realized that your life is dull – and that you need create something to make it colorful. The basic concept of need and want is that, need is something you cannot live without (food, shelter, and clothing) while want is something you can live without (e.g. perfume).

Knowing what is needed and what is wanted is not only important in the study of economics, it also important to be understood by common people. When a person has limited resources (e.g money), the person should be able to allocate his resource to the needs rather than the wants. For example, assuming you have no house and car; given the choice to buy a house or a car with your limited income, what will you buy?

Wants are endless but resources are not.


No comments:

Post a Comment

Subscribe to Philippine Economist via Email