If we were asked, we could all identify certain basic wants which must be satisfied if we are to stay alive. These include the obvious essentials of food, shelter and clothing. We might also identify those wants which are clearly less essential but which we think improve our quality of life. Some might include television sets, cars, trips to the cinema and so on. These are sometimes called luxuries but it is important to remember that what might be a luxury for one individual may be considered an essential for others. This is because we all have a scale of preference with our more urgent wants at the top and the less urgent ones at the bottom. Each individual's scale of preference is a product of a complex set of influences, involving our culture, upbringing and life experiences. These together influence our likes and dislikes. Unsurprisingly, since we all have different experiences, there is bound to be great variation between any two individual's scales of preferences. You may find it interesting to conduct a class exercise in which everyone makes a list of ten wants in descending order or priority. When you compare results you may be surprised to find that, although there may be broad agreement on the first few choices, there is likely to be considerable variation as you compare people's choices over the full list. You may also consider how your list would compare to lists compiled by others with very different life experiences, such as your teachers, your grandparents or even a student of economics in another city. A further point to consider is whether you could imagine any end to your list if you were not limited to ten choices. It is important to remember that our wants are continually expanding, developing and changing.
Some wants expend as we grow up, marry and raise a family. Imagine how our housing needs change as we go through this process or how we change from wanting a small car with two doors to wanting a large family saloon with four doors. Some of our wants develop and expand when we see others around us enjoying goods and services and we feel the need to keep up.
Sometimes, our wants change as we have new experiences, for example we might become vegetarian because we have seen a TV programme on the health risks of eating meat.
All of this points to the fact that we can never imagine a time when all our wants are satisfied. Our wants are continually expanding and changing. Despite the fact that we are continually finding new, more efficient ways to produce more and more goods and services with the resources available to us, we are still faced with the basic economic problem that we have limited resources and unlimited wants. This is sometimes called the problem of scarcity. As a result we have to make choices.
Source: As Level and A Level Economics, Colin Bamford, Keith Brunskill, Gordon Cain, Sue Grant, Stephen Munday, Stephen Walton, University of Cambridge, Cambridge University Press, 2002
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