Economics Case

Economics is the study of human behaviour through scientific monetary theories to analyse economic issues and problems. The study involves the problem of scarcity in relation to supply and demand.

The economic problem in today’s global economy lies within our needs and wants. ‘Wants are unlimited and satisfying them is limited.’ Wants are the desires of individuals, communities and countries for goods and services to satisfy their desires. There are two types of wants; the first is just ‘wants.’ ‘Wants’ refer to food or water to satisfy hunger and thirst in order to live. The second type is call ‘luxury wants,’ this refers to goods and services that assist raise living standards like cars, television, computers, and phones. These wants also are divided in to categories; basic wants are necessity wants (Food, water, clothing and shelter), recurring wants are wants we need in intervals (food water), individual wants are the desire of each person according on their education and income level, collective wants are wants that is demanded by the community (Public Services, Healthcare, Social welfare, Infrastructures), substitute wants are what the consumer is willing to use to satisfy their budget (2nd hand car), luxury wants are the excess of goods and services to enhance lifestyles and complementary wants are derived from other wants such as a knives, forks, petrol. Our wants also depends on our lifestyle, age, income, education and environment. For example, a teenage male’s wants will change as he grows older because of his income level, technology, fashion and age.

In order to fix this ‘economic problem’ we must minimise opportunity costs and maximise efficiency. To minimise opportunity costs and maximise efficiency, Individuals must consider many factors such as; age, income, expectations, future plans, family circumstances and personality factors (Risk taking). Businesses must focus on the type of consumers, how much to produce,