The concept of needs, wants and scarcity is the basis of Business Activity. Their is a slight difference between needs and wants. Needs are essential things one needs to survive, yet wants are the things that people believe they need but are put under the category of luxuries. For example, a person needs water for survival,but it does not need soda; yet he/she believe that soda is also something he/she needs.
This difference between needs and wants is well elaborated by the concept of scarcity. It describes the ratio of needs and wants. It explains that people have more wants yet lesser resources o fulfill them.
Tag: needs
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Needs, Wants and Scarcity.
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Needs, Wants, Scarcity
As you probably know, we all have needs and wants. Needs are things we require to live, like water. I’m sure you can live without a Rolex for as long as you live but you can’t live without water for more then 3 days. Wants are things you can live without but they might make your life easier and make you feel good about yourself. All these needs and desires cost money, which we can only have so much of. Money is in limited supply and not everyone has an equal amount. The idea of having a limited resource is called scarcity.