Way to economics 03

Way to economics 02.

Presents the way of fulfilling human needs.

Basic necessities needed to sustain human life are called needs
Examples: -
Food
Clothes
Housing

 The various forms of fulfilling needs are called wants
Examples :-
Need
Rice
Food Bread
String hoppers Wants
Hoppers

 While needs are combined with biological sources, wants are combined with
traditions, values and culture.
 Needs are limited and wants are unlimited.
 Although needs do not change with time, wants change with it.
 Needs are common to all, wants differ from person to person.

 Wants can be classified as material wants and as non-material wants (physical
wants, mental wants). Economics pays attention only to the material wants that
can be fulfilled through the consumption of goods and services.
 Human wants are fulfilled with goods.
 Anything which provides positive satisfaction or utility is called goods in
economics.
 Goods that fulfill human needs and wants
 Non-economic goods (Free goods/cost free goods/natural goods)
 Economic goods
 Goods with unlimited supply at zero price are called non-economic goods.
Examples :- Air, water and sun light gifted from nature.

 There is no resource cost and opportunity cost with non-economic goods.
 Goods with scarce supply are called economic goods.
Example :-Pens, books, rice, wheat flour

 There is a resource cost and opportunity cost involved with economic goods.
 Economic goods are produced with the intervention of man and with the
combination of resources.
 As economic goods are produced with scarce resources it involves a price and also
there is a problem of choice.

 Although there is no room to convert economic goods to non-economic goods
there are situations where non-economic goods can become economic goods.
Example:- Oxygen used by a diver when diving
Oxygen given to patients
Solar panels produced with solar power
Bottled water

 Oxygen, solar power, water used in the above situations are converted into
economic goods and this has happened because it involves resource cost and an
opportunity cost.
 All inputs used to produce goods and services to fulfill human wants are
called resources.
 There are two forms of resources
1. Economic resources
2. Non economic resources
 Resources with a limited supply against unlimited wants of a society or
resources which are scarce in nature are called economic resources.
 As scarcity is considered the main characteristic of economic resources
when consuming opportunity costs arise with these resources.
Example:- A used land, fuel
 The non scarce resources gifted by nature and which do not involve an
opportunity cost are called non economic resources.

 Resources gifted from nature used in the production process are called
natural resources.
Example :- sun light, air, rain water

 There are two forms of natural resources.
1. Renewable resources
2. Non-renewable resources
 The resources which do not used up with consumption are called
renewable resources. These resources are generated again.
Example:- forestry, fisheries

 The resources which are used up with consumption and the resources
which do not generated again are called nonrenewable resources.
Example:- Diamonds, gas, gold, coal

 As nonrenewable resources depreciate fast these resources may should
not be preserved for the future. In addition, sustainable development can
be delayed with this. Therefore it is important to protect natural resources.

 Due to over consumption of natural resources, it should face for number
of problems globally.
Examples: Increase of global warming
Liquidation of glaziers
Damage to the ozone layer
Shortage of water
Natural disasters such as floods and land slides

 To prevent the unfavorable effects of such problems it is essential to
protect natural resources.