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WEEK 2
MEANING OF ECONOMICS AND RELATED CONCEPTS: BASIC CONCEPTS OF ECONOMICS
Content
Concepts of wants, Scarcity, Scale of Preference, Choice and Opportunity Cost
Sub-Topic 2: Basic Economic Concepts
These are:
- Wants
- Scarcity
- Scale of Preference
- Choice
- Opportunity Cost
WANTS
Wants may be defined as mere desire, needs, wishes or ends of human beings not backed by ability to pay. The basic needs of man are food, shelter and clothing. Human wants are many and insatiable but the resources to satisfy them are scarce and limited. Examples of wants are houses, cars, shoes, air-conditioner, books, hand-sets, computers properties etc.
SCARCITY
Scarcity is the limited supply of resources to satisfy unlimited wants. It is a fundamental economic problem because individuals, firms and the government are all faced with limited resources to satisfy competing and unlimited wants. For example, asa student, if you are told to list all that your heart desires, you will find out that you do not have the resources to satisfy all your wants. This is the essence of choice-making.
CHOICE
Choice arises as a result of scarcity of resources to satisfy man’s numerous and unlimited wants. Since it is impossible to produce everything, a person wants, choice has to be made a among competing wants by picking the most pressing wants based on the available resources.
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