Satisfying Needs and Wants
Needs and Wants
What are Needs?
Needs are things that are required in order to live. Everyone needs food, water, clean air, clothing, and shelter. Other needs in today's economy are a good education, a good job, and safety. Most people need transportation to and from school and work. People who have health problems need health care and medicines.
Needs are things that are required in order to live. Everyone needs food, water, clean air, clothing, and shelter. Other needs in today's economy are a good education, a good job, and safety. Most people need transportation to and from school and work. People who have health problems need health care and medicines.
What are Wants?
Wants are things that add comfort and pleasure to your life. You may believe you can't live without name brand jeans and the latest cell phone technology, but you can, and many people do. A small apartment provides needed shelter, but many people want a large apartment or a house. Public transportation is available in many cities, but a late-model luxury car might provide a driver with an image of success.
Wants are things that add comfort and pleasure to your life. You may believe you can't live without name brand jeans and the latest cell phone technology, but you can, and many people do. A small apartment provides needed shelter, but many people want a large apartment or a house. Public transportation is available in many cities, but a late-model luxury car might provide a driver with an image of success.
Needs and Wants Are Unlimited
Your needs and wants never end. You are limited only by your imagination and by what businesses make available for sale. A new style convinces you your current backpack is no longer adequate. One purchase often leads to another. You purchase the latest model video game player and now you need a new set of games. Purchasing a new pair of shoes may mean you will want matching accessories.
Your wants can go on and on, and they change from day to day. A product you thought you couldn't live without two weeks ago doesn't seem as important now and is replaced by a new want. Everyone has unlimited want but those wants will not be the same for each person.
Your needs and wants never end. You are limited only by your imagination and by what businesses make available for sale. A new style convinces you your current backpack is no longer adequate. One purchase often leads to another. You purchase the latest model video game player and now you need a new set of games. Purchasing a new pair of shoes may mean you will want matching accessories.
Your wants can go on and on, and they change from day to day. A product you thought you couldn't live without two weeks ago doesn't seem as important now and is replaced by a new want. Everyone has unlimited want but those wants will not be the same for each person.
Goods and Services
You satisfy your needs and wants by purchasing and consuming
goods and services.
What are Goods?
Goods are things that you can see and touch. They are the products you can purchase to meet your wants and needs.
What are Services?
Services are activities provided for the satisfaction of others that are consumed at the same time they are produced. You purchase and use services to satisfy your wants and needs, but unlike goods, businesses must provide services to you at the time you want to consume them.
What are Goods?
Goods are things that you can see and touch. They are the products you can purchase to meet your wants and needs.
What are Services?
Services are activities provided for the satisfaction of others that are consumed at the same time they are produced. You purchase and use services to satisfy your wants and needs, but unlike goods, businesses must provide services to you at the time you want to consume them.
Goods and Services for Businesses and Consumers
Goods and services are purchased by businesses as well as by individual consumers. Some goods and services are unique for business or consumer use. Others are similar but meet different needs and wants.
A business needs steel, plastic, gasoline, and computers in order to operate. It must have a constant supply of electricity, security for buildings and equipment, and accountants who maintain records and file tax returns.
Consumers buy furniture, televisions, cell phones, and books. They eat at restaurants, go on vacations, and take their car to the auto dealer for service and repairs. Businesses provide the goods and services that meet business and consumer needs and wants.
Goods and services are purchased by businesses as well as by individual consumers. Some goods and services are unique for business or consumer use. Others are similar but meet different needs and wants.
A business needs steel, plastic, gasoline, and computers in order to operate. It must have a constant supply of electricity, security for buildings and equipment, and accountants who maintain records and file tax returns.
Consumers buy furniture, televisions, cell phones, and books. They eat at restaurants, go on vacations, and take their car to the auto dealer for service and repairs. Businesses provide the goods and services that meet business and consumer needs and wants.
The U.S. Economy
The United States is the largest producer of goods and services in the world. It produces more than the next two largest producers, China and Japan, combined. The United States is also the world's largest consumer. For example, the United States ranks first in oil consumption. In 2009, it consumed almost 20 million barrels per day which was more than the combined consumption of the next four countries—China, Japan, Russia, and India.
America's lead in consuming goods and services increased throughout the twentieth century and continues today. The shift from an economy based on agriculture to an industrialized economy resulted in higher incomes and more choices of products and services for consumers. With more money to spend and more ways to spend it, consumer spending increased.
Increased consumer spending in a country results in more jobs and a higher standard of living. However, as consumption within a country increases, new challenges emerge for consumers. The ready availability of many products and services, along with frequent advertising, tempts consumers to buy things they may not need. With careful buying decisions, people can meet their basic needs, satisfy some of their wants, and still save and invest for the future.
Increased consumption also creates challenges for countries. Controlling pollution, preserving natural resources, and managing waste are all growing concerns worldwide. In addition to being the world's largest producer of goods and services, the United States is tops in another area—Americans produce more garbage per person per year than the residents of any other country.
The United States is the largest producer of goods and services in the world. It produces more than the next two largest producers, China and Japan, combined. The United States is also the world's largest consumer. For example, the United States ranks first in oil consumption. In 2009, it consumed almost 20 million barrels per day which was more than the combined consumption of the next four countries—China, Japan, Russia, and India.
America's lead in consuming goods and services increased throughout the twentieth century and continues today. The shift from an economy based on agriculture to an industrialized economy resulted in higher incomes and more choices of products and services for consumers. With more money to spend and more ways to spend it, consumer spending increased.
Increased consumer spending in a country results in more jobs and a higher standard of living. However, as consumption within a country increases, new challenges emerge for consumers. The ready availability of many products and services, along with frequent advertising, tempts consumers to buy things they may not need. With careful buying decisions, people can meet their basic needs, satisfy some of their wants, and still save and invest for the future.
Increased consumption also creates challenges for countries. Controlling pollution, preserving natural resources, and managing waste are all growing concerns worldwide. In addition to being the world's largest producer of goods and services, the United States is tops in another area—Americans produce more garbage per person per year than the residents of any other country.
Economic Resources
How are the goods and services you need and want produced? Individuals no longer create most of the products and services they consume as people did many years ago. Businesses produce goods and services using economic resources. Economic resources are the things available to be used to produce goods and services. Economic resources are also known as factors of production . The three types of economic resources are natural resources, human resources, and capital resources. Businesses and individuals must be able to obtain the needed economic resources to produce goods and services.
Natural Resources
Raw materials supplied by nature are natural resources . The earth contains oil, minerals, and the nutrients needed to grow crops and forests and to feed animals. Rivers, lakes, and oceans are the sources of both food and water. The air you breathe comes from the atmosphere that surrounds you. All products you consume begin with one or more natural resources.
Consider something as simple as a can of vegetable soup. What natural resources were used in its production? The vegetables and spices are produced using the resources found in rich farmland. The water comes from wells or reservoirs that were filled by rain. Aluminum was extracted from the ground and combined with other resources to produce the container.
While there is an abundance of many natural resources around the world, their supply is limited in many areas. Increased consumption as well as damage to the environment threatens the availability of many natural resources. Recycling and conservation practices as well as the design of more efficient products help to preserve resources.
Raw materials supplied by nature are natural resources . The earth contains oil, minerals, and the nutrients needed to grow crops and forests and to feed animals. Rivers, lakes, and oceans are the sources of both food and water. The air you breathe comes from the atmosphere that surrounds you. All products you consume begin with one or more natural resources.
Consider something as simple as a can of vegetable soup. What natural resources were used in its production? The vegetables and spices are produced using the resources found in rich farmland. The water comes from wells or reservoirs that were filled by rain. Aluminum was extracted from the ground and combined with other resources to produce the container.
While there is an abundance of many natural resources around the world, their supply is limited in many areas. Increased consumption as well as damage to the environment threatens the availability of many natural resources. Recycling and conservation practices as well as the design of more efficient products help to preserve resources.
Human Resources
The people who produce goods and services are known as human resources . In the example of the vegetable soup, many people are needed to complete the work required to produce that product. Farmers raise the livestock and crops.
Even water, one of the most common substances on the planet, is a scarce natural resource, especially in the western United States. Disputes among southwestern states over water rights and access to the major riverways result in frequent political debate and court actions. Water will likely become an even more important natural resource in the future.
Factory workers and managers use equipment designed by engineers and manufactured by the employees of other businesses to process the food. Truck drivers, salespeople, advertisers, and supermarket employees are also involved in making the soup available to consumers for purchase.
One type of human resource is an entrepreneur. An entrepreneur is the risk taker who uses resources to create a new product or service. Without the creative ideas of entrepreneurs and their belief that they can develop a successful business, there would be fewer choices of goods and services and fewer employment opportunities.
The people who produce goods and services are known as human resources . In the example of the vegetable soup, many people are needed to complete the work required to produce that product. Farmers raise the livestock and crops.
Even water, one of the most common substances on the planet, is a scarce natural resource, especially in the western United States. Disputes among southwestern states over water rights and access to the major riverways result in frequent political debate and court actions. Water will likely become an even more important natural resource in the future.
Factory workers and managers use equipment designed by engineers and manufactured by the employees of other businesses to process the food. Truck drivers, salespeople, advertisers, and supermarket employees are also involved in making the soup available to consumers for purchase.
One type of human resource is an entrepreneur. An entrepreneur is the risk taker who uses resources to create a new product or service. Without the creative ideas of entrepreneurs and their belief that they can develop a successful business, there would be fewer choices of goods and services and fewer employment opportunities.
Capital Resources
People must have access to tools and equipment in order to convert natural resources into products. The products and money used in the production of goods and services are capital resources . Capital resources include buildings, equipment, and supplies. They also include the money needed to build a factory, buy or lease vehicles, pay employees, or purchase goods and services required to manufacture and distribute other goods and services.
Some people invest money in businesses so the business will have the capital needed to operate. Those people expect they will make money from the profits earned by the business. Other people receive income by selling their knowledge and skills to businesses in the form of labor. Those with special skills or knowledge of important business processes often command higher incomes than those with knowledge and skills that are more common or in less demand.
People must have access to tools and equipment in order to convert natural resources into products. The products and money used in the production of goods and services are capital resources . Capital resources include buildings, equipment, and supplies. They also include the money needed to build a factory, buy or lease vehicles, pay employees, or purchase goods and services required to manufacture and distribute other goods and services.
Some people invest money in businesses so the business will have the capital needed to operate. Those people expect they will make money from the profits earned by the business. Other people receive income by selling their knowledge and skills to businesses in the form of labor. Those with special skills or knowledge of important business processes often command higher incomes than those with knowledge and skills that are more common or in less demand.
Resources Are Limited
All economic resources have a limited supply. Most resources can be used to produce several different products and services. If resources are used to produce one type of product, they will not be available for the production of something else.
Individuals, businesses, and even countries compete for access to and ownership of economic resources. Those resources that are in very high demand or that have a limited supply will command high prices. Because there is a limited amount of natural resources, there will also be a limit to the amount of goods and services that can be produced.
All economic resources have a limited supply. Most resources can be used to produce several different products and services. If resources are used to produce one type of product, they will not be available for the production of something else.
Individuals, businesses, and even countries compete for access to and ownership of economic resources. Those resources that are in very high demand or that have a limited supply will command high prices. Because there is a limited amount of natural resources, there will also be a limit to the amount of goods and services that can be produced.