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2. Economic decisions:
These deal with multiple goals and limited resources. As human beings, we always have many wants which may lead to many goals. Each of these goals needs allocation of the limited resource. These kinds of decisions are household frequently, to utilize the resources effectively to achieve maximum goals of the family. These decisions need not be related to money alone. They may be related to many other resources like time, energy, space etc.
Examples: (i) going to market (ii) finishing household work, are the goals.
How you use your resources like time, energy money etc are the economic decisions.
Inherent in these decisions are the characteristics of exchange and allocation resources. In order to achieve the goals, resources are either allocated and/or exchanged. Keenan's representation of these decisions is as follows.
Assume the multiple goals are to:
- Achieve a high grade on a test to be given tomorrow.
- Attend a party given at a friend's house this evening.
- Get the laundry done and go shopping for a birthday present.
- Clean the room by tomorrow morning.
- Finish the library research for a term paper due at the end of the week.
The established but limited resources are time and energy. One must begin by setting priorities for goals. Following this we allocate the resources among the combination of goals that will bring about the greatest degree of satisfaction while maximizing the resources used.
Although these decisions are not the easiest to make, in daily life we continuously make economic decisions. These decisions involve a greater degree of risk than do technical decisions.
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