Module 1. Basic concept of economics

Lesson 2


2.1 Introduction

Human beings have unlimited wants such as food, clothing, shelter, education, entertainment, leisure, etc. when one want is fulfilled, immediately other wants grow up. This chapter describes basic characteristics of human wants.

2.2 Human Wants

Human being has many desires which culminate into wants. There is no end to human wants. Some wants are to meet basic necessities of life whereas some are to make life more comfortable and luxurious.

2.2.1 Characteristics of human wants

Human wants has following characteristics

1. Human wants are unlimited: Human being always lives in a stage of dissatisfaction. When one want gets satisfied another arises and when that gets satisfied another emerges. All Human beings undergo this process continuously. This leads to emergence of large number of wants one after the other. This cycle never ends and so one can say human wants are not limited.

2. Want is satiable with respect to time / place: On one hand human wants are infinite but on the other hand it is possible to satisfy a single want at particular time / place e.g. If one wants to own a luxurious house, one can get it provided one has money.

3. Wants are Complementary: It is not possible to get ourselves satisfied by using a single good. The very nature of most of the goods makes it necessary to use them in combination e.g. to own a vehicle according to one’s own financial capability is one of the important wants for most of the individuals. But mere owing vehicles does not given full satisfaction. If requires fuel to run the vehicles.

4. Wants are Competitive: Wants are unlimited but means to satisfy them is limited. Each person has limited money. One cannot satisfy all wants at a particular time. Thus based upon need, most pressing wants gets priority for satisfaction. Hence each want is in competition with other.

5. Wants change with people, place and time: Due to human psychology, for a single individual wants go on changing. As a young individual, person might want to lead a luxurious life and strive hard to achieve that. Later in the life, one wants piece of mind and prefers to join any religious sect. At the same time wants vary across the individuals of same age and group also.

6. Wants are alternative: A want can be satisfied by different alternatives. The choice of alternative depends upon preference and money at the disposal of individual e.g. If a person is hungry and want food, it can be satisfied by variety of alternatives.

7. Wants increases with progress of society: With progress of society, new avenues are available to mankind to satisfy diverse wants, with progress of society, technological advancements occurs which provides new things to satisfy human wants. Thus wants to people living in developed nations are different from those of developing and underdeveloped nations.

8. Wants differ in intensity and urgency: The unlimited wants occupy different positions in hierarchy. The human beings want to satisfy first of all most basic needs of foods, clothing, shelter, and then look for others.

9. Wants gets converted into habits: Continuous satisfaction of a particular want regularly lead to the formation of habit, e.g. Addiction of tea or coffee with most of the individuals in morning.

10. Wants Recurring: Many wants are of recurring nature e.g. each individual wants to satisfy need of hunger daily at regular interval.

11. Wants are influenced by customs or traditions: We live in society. Man is a social animal. Whether we like or not, we are bound to accept customs or traditions of our society.

12. Wants are affected by Promotion and Income: Our purchasing power and promotion methods adopted by business organizations influence buying process.

2.3 Importance of Wants

Human wants have different characteristics, which are related with important laws of economics as depicted in Table 2.1.

Table 2.1 Relation of human characteristics with economic laws

2.4 Classification of Human Wants

Based upon need, usage and importance human wants can be classified into following categories.

1. Necessity: This includes most essential things and further subdivided into following categories.

a) Necessity for existence: Human being requires certain basic things for their existence. It is difficult to survive without them. This includes basic necessities of life viz. food, clothing and shelter.

b) Necessity for efficiency: Some wants are of such a nature that human beings can live without them but if provided, they increases the efficiency. In today’s education system, a teacher can teach without LCD projector but if it is provided, it definitely increases the efficiency.

c) Necessity of convention: Human being is a social animal. The society specifies certain unwritten rules which each individual has to obey. Adoption of this rules give rise to conventional human wants e.g. It is mandatory to dress appropriately according to social situations such as marriage ceremony or mourning ceremony. This leads to wants of situation specific dress materials.

2. Comforts: In order to live a more pleasant and more fuller life, human beings go for additional wants. After obtaining necessity for existence, one goes for purchasing comfortable things e.g. fan is necessary of efficiency in offices but air conditioner is a comfort.

Luxury: Human being are still not satisfied with comforts, they still go for obtaining luxuries. It is not possible to categorize wants into a fixed category either as necessity, comfort or luxury. It depends upon preferences, living standard of persons, stage of economic development of a country, time period etc. A mobile was luxury in past but now it is probably necessity for most of the people. Similarly a private air craft is a luxury for most of the people but even it is a necessity for very busy owners of large business houses and politicians in election time.
Last modified: Tuesday, 6 November 2012, 8:51 AM