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What are wants and needs? Needs+= must have to survive items:
Food, clothing shelter, air, water etc.
Wants= things we’d like to have but they are not necessary for survival- unlimited!
How do we satisfy those unlimited wants and needs? We use our very limited resources of
course?
This is called Scarcity!
Because we all have unlimited wants and needs but suffer from limited resources we always face the problem of Scarcity– we must choose wisely.
We can buy Goods & Services to satisfy that utility. But which do I choose?
Sometimes those goods and services are temporarily unavailable.
Economists call that a ShortageSold Out
How can we maximize our Utility? = Efficiency We weigh our choices and compare
benefits to the costs of each alternative
Economists call this Tradeoffs and Opportunity costs
Tradeoffs= precieved value To Adam Smith and his concept of the
market economy-(laissez faire)
Those values are best determined by the individual