01--Needit demand in economics

8/14/2019 01--Needit demand in economics

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NEED/DESIRE/WANT/DEMAND

NEED-Arousal of awareness orrecognition that one has to take

some action to remove a particularfeeling.

Something missing that requires tobe obtained to remove thefeeling.Eg.hunger,rest,illness etc

Related with essentials of lifewithout which one cannot live


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DESIRE

Awareness of need leads to desirefor satisfying it or removing it.


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WANTS

Desire backed by purchasingpower for satisfying it or removingit


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Blueprint Skill Economics

Classify needs and wants usingpictures of common items (i.e.,food, cleaning products, clothes,candy, makeup).


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NEED$ AND WANT$

One importantidea ineconomics isthat of needsand wants.


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NEED$ AND WANT$

Needs would be defined as goodsor services that are required. Thiswould include the needs for food,clothing, shelter, health care.

These are things you must have to

live.


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NEED$ AND WANT$

Wants are goods or services thatare not necessary but that wedesire or wish for.


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NEED$ AND WANT$

For example, one needs clothes,but one may not needs designerclothes. One does not need toys,movies, or games. One needsfood, but does not have to have

steak or dessert.


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NEED$ AND WANT$

Many timesadvertisers try to

appeal to consumersin such a way that theconsumers feel theyneed certain goods or

services when in factthey only want them.


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NEED$ AND WANT$

Do you need this or do you want this?


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NEED$ AND WANT$

Need or want?


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NEED$ AND WANT$

Need or want?


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NEED$ AND WANT$

Try this need and wants activity.

Activity
http://www.mcwdn.org/ECONOMICS/NeedsWantsQuiz.htmlhttp://www.mcwdn.org/ECONOMICS/NeedsWantsQuiz.html


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Resources Needs and Wants
http://www.mcwdn.org/ECONOMICS/NeedWant.htmlhttp://www.mcwdn.org/ECONOMICS/NeedWant.html


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Human Wants

Goods are priced because of their usefulness;Usefulness leads to the demand whilescarcity leads to its supply. Therefore theinteraction of demand and supply is the pointwhere the prices of goods is determined.


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Human Wants : The basis of all economicactivities is the existence of human wants

and the process of fulfillment of this wantis where all economics activities start.

Definition of Human Want :

. Desire is the wish to have something.But want is an effective desire for aparticular thing, which can be satisfied bymaking an effort to acquire it.


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Human Wants

Three elements that make a desire, an effective desire or a want:

(i) willingness

(ii) resources for fulfilling the desire and

(iii) willingness to part with the resource to fulfill that desire

In other words its the want-effort-satisfaction which forms thesubject matter of economics


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DEMAND

Quantity purchased at a givenprice and at a given point of time


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Features of Human Wants

Classification of Human Wants : necessaries, comfort andluxuries.

Features :

1. Unlimited Wants

2. Some wants are complementary

3. A single want is satiable

4. Substitutability of Wants

5. Wants are competitive

6. Wants multiply

7. Wants re-occur

8. Some wants can be postponed

9. Wants differ in urgency and intensity


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Economic Significance of

Human Wants 1 The material prosperity of a

country can be gauged from the

number and variety of humanwants normally satisfied.

2 Shows important features which

are the basis of important laws inEconomics Laws of diminishingreturn, law of substitution, etc


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Consumption

Goods and services need to beconsumed in order to satisfy

human wants. Consumption isregistered the beginning as wellas the end of all economicactivities.


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Utility Utility refers to want satisfying power of

a commodity.

In objective terms, utility may bedefined as the amount of satisfactionderived from a commodity or service ata particular time.

Utility can be measured.


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Demand

Meaning and Definition of Demand According to Benham: The demand

for anything, at a given price, is theamount of it, which will be bought perunit of time, at that price.

According to Bobber, By demand we

mean the various quantities of a givencommodity or service which consumerswould buy in one market in a givenperiod of time at various prices.


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Requisites:

a. Desire for specific commodity.

b.Sufficient resources to purchase thedesired commodity.

c. Willingness to spend the resources.

d.Availability of the commodity at

e. (i) Certain price (ii) Certain place (iii)Certain time.


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Kinds of Demand

1.Market demand2. Individual demand3. Income Demand-(later)


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- 4. Cross demand

- Demand for substitutes or competitivegoods (eg.,tea & coffee, bread and rice)

- Demand for complementary goods (eg.,pen & ink)

- 5. Joint demand (same as complementary,eg., pen & ink)

- 6. Composite demand (eg., coal &electricity)


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- 7. Direct demand (eg., ice-creams)

- 8. Derived demand (eg., TV & TVmechanics)

- 9. Competitive demand (eg., desi

ghee and vegetable oils)- 10.Demand of unrelated goods


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Factors Determining

Demand (i) Price of the commodity Normally

there is an inverse relationship betweenthe price of the commodity and thequantity demanded. (Px)

(ii) Income of the Consumer Determinesthe purchasing power of the consumer.Generally, there is a direct relationship

between the income of the consumerand demand. (Y)

Qdx = f (Px, Pr ,Y , T, D)


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(iii) Consumers taste and preference (T)

(iv) Price of related commodities (Pr) (v) Consumer Expectation (expected change in

price)

(v) Distribution of income

(vi) Size and composition of population

(vii) Other Factors e.g., natural calamities

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01--Needit demand in economics