Economics - Research Article from Encyclopedia of Business and Finance

This encyclopedia article consists of approximately 10 pages of information about Economics.
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Wants, Needs, and Scarcity

As a society, and in economic terms, people have unlimited wants; however, resources are scarce. Don't confuse wants and needs. Individuals often want what they don't need. In the automobile example used above, someone might want to drive a large luxury car, but a small pickup truck may be more suited to the purchaser's needs if he or she must have a vehicle for hauling furniture. Economic decisions must be made.

Robert Mundell, 1999 Nobel Economics winner. Robert Mundell, 1999 Nobel Economics winner.

A resource is scarce when there is not enough of it to satisfy human wants. And human wants are endless. Because of unlimited wants and limited resources to satisfy those wants, economic decisions must be made. This problem of scarcity (limited resources) must be addressed, which leads to economics and economic problems.

Figure 1 illustrates the relationships that exist relative to wants and scarcity. Many elements influence economic decisions. To...

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This section contains 2,956 words
(approx. 10 pages at 300 words per page)
Buy the Economics Encyclopedia Article
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Encyclopedia of Business and Finance
Economics from Encyclopedia of Business and Finance. Copyright © 2001-2006 by Macmillan Reference USA, an imprint of the Gale Group. All rights reserved.
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