Individuals need goods and services to survive in this world. Goods such as food and shelter, and services such as health and education are examples of goods and services which we depend on in this day and age. Goods and Services may be essential, basic needs for human survival but humans also want other goods and services that would improve their quality of life (i.e. Needs are the basic necessities of life such as food, shelter and clothing and Wants are materialistic, non-essential items of request from individuals or the community).
The economic problem is due to individuals having finite needs and infinite wants and there are only limited, finite resources to satisfy them.
Their wants are unlimited- as soon as they satisfy one want, another want to be satisfied would arise. Factors which effect the number of wants are due to: Recurrent wants (wants which individuals satisfy continually; example food and newspapers), Complementary wants (wants that naturally follow the initial satisfaction of another want; example CD player and CDs) and time (as we grow older our wants change due to age, income, technology and fashion; example a 5 year old boy would want a scooter but when he is 25 he would rather a house).
a limited income, they cannot satisfy their wants all at once (i.e. we cannot have everything we want). This results in choice- choosing between our wants. Finite resources (limited income), is a barrier to satisfy all individuals wants; this leads them to choose between certain wants.
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