HSS C012
Principles of Economics
Session 2
What about
economics?
Need and Want
The image is taken from
https://miro.medium.com/v2/resize:fit:640/format:webp/0*Nw9IM_hEBVVGk8uo.jpg
Need and Want
 Need: something essential or necessary for survival and well-being. It is something
that you must have to live a healthy and stable life.
 Examples of needs include:
1. Food
2. Water
3. Shelter
4. Clothing
5. Healthcare
6. Education
Need and Want
 Want: is something that you desire but is not essential for survival. Wants are more
subjective and can vary greatly between individuals.
 Examples of wants include:
1. Luxury items (e.g., designer clothes, high-end electronics)
2. Entertainment (e.g., movies, vacations)
3. Hobbies and leisure activities (e.g., sports equipment, books)
4. Convenience items (e.g., gadgets, dining out)
Resource
 Everything in our environment which can be used to satisfy our needs, provided, it is
technologically accessible, economically feasible and culturally acceptable can be
termed as resource.
 In economics, "resources" refer to the inputs used to produce goods and services.
The Foundation of Economics
Economics
 Economics is the study of how people manage their resources to meet their needs
and enhance their well-being.
 Economics is the study of how humans make decisions in the face of scarcity.
 These can be individual decisions, family decision and business decisions.
 If you look around carefully, you will see that scarcity is a fact of life.
Definition of Economics
Definition of Economics
Definition of Economics
Why learn economics?
To understand
 how decisions are made,
 how markets work,
 how economic forces drive social systems will equip people to make better decisions
and solve more problems.
Scarcity
 Scarcity means that human wants for goods, services and
resources exceed what is available.
 Resources, such as labor, tools, land, and raw materials
are necessary to produce the goods and services we
want but they exist in limited supply.
 Of course, the ultimate scarce resource is timeeveryone, rich or poor, has just 24 hours in the day to try
to acquire the goods they want.
 At any point in time, there is only a finite amount of
resources available.
Figure from https://www.withtap.com/sv/blog/what-is-scarcity
Example of Scarcity
Implications of Scarcity
Scarcity = Value