Discuss the Importance of Multiplicity of Wants and Scarcity of Resources in the Study of Economics.

Explain the terms “Want” and “Scarcity” as understood in Economics. Discuss the importance of the multiplicity of wants and shortage of resources in the study of Economics.

Want

Often thought of as a psychological desire which makes life just a little more enjoyable, but which’s not physiologically necessary to live. You need oxygen, but you want a hot fudge sundae. Satisfaction achieved by fulfilling wants. The terms want, and desire is used to mean the same thing. But in economics want leads to the desire which is backed by the ability and willingness to satisfy it. A mere desire for anything does not become a want unless the person can fulfill it and is willing to apply this capability for satisfying the desire. Therefore, human wants may be defined as sufficient desires for particular things which express themselves in the efforts or sacrifices necessary to obtain them. There are four essential elements of human wants.

• The scarcity of items
• The desire to get the scarce items
• Sufficient amount of money to satisfy the want.
• v. Willingness to spend the money to get the expected things.
• Human wants are unlimited, varied and diverse. They encourage people to undertake economic activity.

Satisfaction of wants through production and exchange of goods and services is the fundamental aim of business.Wants may classify into two broad categories.

• Primary or necessary desires, e.g., food, clothing and shelter which are common to all persons; and
• Secondary or non‐basic wants, e.g., education, traveling, etc., which differ from person to person. A person first of all tries to satisfy his primary wants at all costs.

Satisfied as and when the essential supplies become available.

Scarcity

An economic principle in which a limited amount of real, united with a high need for that good, results in a mismatch between the desired supply and demand equilibrium. In pricing theory, the scarcity principle suggests that the price for a scarce commodity should rise until equilibrium reached Between supply and demand. However, this would result in the restricted exclusion of the real only to those who can afford it. If the scarce resource happens to be grain, for example, individuals will not be able to attain their basic needs. When a product is scarce, consumers are faced with conducting their Cost-benefit analysis, since a product in high demand but low supply will likely be expensive. These means that the user should only take action and purchase the product if he or she sees a greater benefit from having the product than the cost associated with obtaining it.

Importance of multiplicity of demands and scarcity of resources in the study of Economics:
Economic problem, in essence, is issues of lack of resources in comparison with human wants. In everyday life, we encounter many financial difficulties, poverty, unemployment, inflation, etc., but if we start analyzing them, we will find that every problem has it's rooted in the fundamental problem of scarcity of resources.Poverty forces choices in consumption and production of goods. Poverty creates conflicts. Poverty means that not everybody is getting everything he wants, and there will be losers and winners. The debt arises because of two underlying conditions: Physical condition, that is, limited productive resources and a mental state that is unlimited wants. Physical limits do not alone establish scarcity in an economic sense. It is the human desires which make funds insufficient. Wants are unlimited; people want much more than just necessities. So the bitter fact is an economic problem is permanent.