Hello friends Summarized! This time we will discuss the article about the relationship between needs, wants and scarcity. Have you ever felt confused why there are rare and expensive items? Or why there are needs to be met and wants to be postponed? If you are curious about these things, then you need to understand the relationship between needs, wants, and scarcity. This article will explain these concepts in a concise and easy to understand manner. Let’s see this article!
What is the Relationship Between Needs Wants and Scarcity
Human Needs and Desires
Needs are desires that arise in humans if not fulfilled can affect their survival. Examples are the need for food, drink, clothing, shelter, health, and education. This need is primary or basic , meaning that it must be met first before meeting other needs.
Desire is a desire that arises in humans if it is not fulfilled it will not affect their survival. Examples are desires for hobbies, entertainment, vacations, luxuries, and lifestyles. This desire is secondary or additional , meaning that it can be fulfilled after meeting the primary needs.
Human needs and desires are very diverse and continue to evolve with the times. However, not all human needs and desires can be fulfilled due to limited resources or means of satisfying needs.
Scarcity of Resources
Scarcity is a condition in which unlimited human needs and desires are confronted with limited means of satisfying needs. This scarcity is a fundamental problem in economics. Scarcity arises because the resources or factors of production used to produce goods and services as means of satisfying needs are limited in number.
Resources or factors of production consist of land, labor, capital, and entrepreneurship. These resources have limitations both in terms of quantity and quality. For example, land has a limited area and not all land can be used for agriculture or housing. Labor has a limited number and not all workers have the same skills. Capital has a limited value and not all capital can be used for various types of production. Entrepreneurship has limited capabilities and not everyone can become an entrepreneur.
The scarcity of resources can be influenced by several factors, such as differences in geographical location, population growth, technological developments, and natural disasters. An example of scarcity that occurs due to geographic location is clean water which is scarce in urban areas but abundant in the mountains. An example of scarcity that occurs due to population growth is reduced agricultural land due to residential development. An example of scarcity that occurs due to technological developments is the latest smartphone which is rare due to high demand but low production. An example of a scarcity that occurs due to natural disasters is a scarce mask due to the Covid-19 pandemic.
The Impact of Resource Scarcity
The scarcity of resources has an impact on humans in fulfilling their needs and desires. These impacts include:
- Increased prices of goods and services
- The decline in social welfare
- Rise of competition and conflict
- Encourage innovation and creativity
Rising prices for goods and services are the most common effect of scarcity. This is because demand exceeds supply. For example, the price of rice rose because the harvest failed due to drought. Gasoline prices rose because crude oil production decreased due to the war. Mask prices have risen due to soaring demand due to the pandemic.
The decline in social welfare is the impact of scarcity that affects the quality of human life. This is due to limited access and opportunities to meet needs and desires. For example, poverty that occurs due to lack of income and jobs. Health is disturbed due to lack of facilities and services. Education is hampered due to lack of facilities and infrastructure.
The emergence of competition and conflict is the impact of scarcity that has an impact on human social relations. This is due to differences in interests and priorities in meeting needs and desires. For example, competition between producers for scarce resources. Conflict between consumers to obtain scarce goods and services. Competition and conflict between countries for control of scarce natural resources.
Encouraging innovation and creativity is a potentially positive effect of scarcity on humans in overcoming the problem of scarcity. This is due to the need to find alternative solutions to meet the needs and desires. For example, innovation in technology to increase productivity and efficiency. Creativity in the arts to create unique and interesting works. Innovation and creativity in the economic field to create new business opportunities.
Conclusion
From the explanation above, it can be concluded that the relationship between needs, wants, and scarcity is as follows:
- Needs are desires that arise in humans if not fulfilled can affect their survival.
- Desire is a desire that arises in humans if it is not fulfilled it will not affect their survival.
- Scarcity is a condition in which unlimited human needs and desires are confronted with limited means of satisfying needs.
- The scarcity of resources can be influenced by several factors, such as differences in geographical location, population growth, technological developments, and natural disasters.
- The scarcity of resources has an impact on humans in fulfilling their needs and desires, such as increasing prices of goods and services, decreasing social welfare, emergence of competition and conflict, and encouraging innovation and creativity.
Thus the article about the relationship between needs, wants, and scarcity. Hopefully this article is useful for those of you who want to understand basic concepts in economics. If you have questions or comments regarding this article, please write in the comments column below. Thank you for reading!
