People have many different wants and needs. There are three basic human needs – food, clothing and shelter. Once our needs are satisfied, there are many other things that we want to have to help make our lives more comfortable and pleasant. For example we might want a mobile phone, the latest music from our favourite band, an annual holiday or to see that new Pirates of the Caribbean movie that has just come out.
Our wants and needs are satisfied with the resources that are available to us. However, there is one problem – resources are limited or relatively scarce. Relative scarcity means that we do not have enough resources to satisfy all our wants and needs.
It is not possible to satisfy our many wants. Even if we were able to satisfy all of our current wants, we would soon think of new things we would like to have. For example an iPad 2 or a new 3G Android mobile phone. Producers are constantly aware of this and are very clever at playing into our hands, producing new goods and services to help create a new want. Marketers and advertising then try to tell us that we can satisfy our wants if we have the latest product.
Economic resources are scarce and it is for this reason we study economics. In the next post we will look at economic resources in more detail.