Wants are desire
for a thing with a feel of absence of it. Wants are unlimited in
nature because wants are recurring and frequently changing. These wants
are classified into three different types.
The Classification
of wants: 1. Needs (Necessities) 2. Comforts and
3. Luxuries
Needs (necessities) are commodities or services essential for the survival
of human being. These necessities are further classified into
three. Necessaries of a) existence, b)
efficiency c) convention. Comforts
refer to a state of being comfortable (conditions in which somebody feels
physically relaxed) but it is not necessary for human existence. Luxuries are highly non-essential
items that are desirable for pleasure and not essential, and often highly
expensive or hard to get.
These
classifications are not always same. Luxuries [e.g. air conditioners] of
some place/ circumstances/country may be a comfort in another place/
circumstances/country [e.g business houses or and necessity in another
place/ circumstances/country. [e.g. hot Sahara deserts or cold polar
regions]
Resources are of three categories they are (1) Natural
resources (2) Human resources and (3) Man-made
resources. (1) Natural
resources are the raw materials that are extracted from earth and sea
and it is termed as “Land”. (2) Human
resources are the mental and physical efforts of human being. It
is termed as “Labour”. (3) Man- made
resource are the produced resources for further production. It is
also called as “capital”. Those factors, its characteristics and its rewards are dealt in - Factors of production.
These
resources are also called as
factors of production [material or foundation of production] According to the
nature or characteristics of the resource, except human resources [labour
and entrepreneur] are called goods and services goods are visible, materiel
thing that satisfy some human wants. e.g. Book, pen, chair, table Services are invisible,
immaterial thing that satisfy some human wants. e.g. The services of a doctor,
teacher, nurse, accountant. These goods and services are classified into
various categories.
There
are different types of goods and services. The classification of goods are services are as follows.
Economic goods are scarce so that we have to pay a price for them.
The supply of it is less than the demand for it. e.g. Land,
Mineral.
Free goods are found in such abundance that we need not pay a price
for them. The supply is infinite. e.g. sunshine, natural air.
Durable goods are those, which render their service for a long period of
time, e.g. table, washing machine.
Non-durable (perishable) goods are those goods, which render their
services for a short period of time e.g. vegetable, fruits.
Consumer goods are those used for their own sake e.g. Clothes,
fans.
Producer’s goods are those used for the sake of producing other goods.
e.g. Fishing boat, deep freezer, etc.
(The
difference depends on who uses the good. A fan in the factory is a producer
good and it is a consumer good when it is in a house.)
Transferable goods are those goods which could be exchanged
physically.
Non-transferable goods are the personal
qualities such as intelligence (internal to human being) and could not transfer
physically.
Private goods are those goods which are owned by private individuals.
Public goods are those goods which are owned by general public
[so it is under the ownership of the government] Public goods are
characterised by 1) Non – rivalry
[consumption by one person does not mean that they are not available to
others] 2) non-excludability in consumption [ no person can be excluded from
their consumption].
Merit goods are those which the government of a country thinks
desirable for the welfare of the people. Health and education are
examples.
Demerit goods are those which the government of a country thinks
undesirable or disadvantageous for the welfare of the people. Tobacco and
intoxicating drugs are examples
Human wants are unlimited and the resource to satisfy the wants are strictly limited is the basic economic problem.
Human wants are unlimited and the resource to satisfy the wants are strictly limited is the basic economic problem.