People have limited number of needs which must be satisfied if they are to survive as human beings.
Introduction of The Fundamentals Of Managerial Economics
People have limited number of needs which must be satisfied if they
are to survive as human beings. Some are material needs, some are psychological
needs and some others are emotional needs. People’s needs are limited; however,
no one would choose to live at the level of basic human needs if they want to
enjoy a better standard of living. This is because human wants (desire for the consumption of goods and services) are
unlimited. It doesn’t matter whether a person belongs to the middle class in
India or is the richest individual in the World, he or she wants always
something more. For example bigger a house, more friends, more salary etc.,
Therefore the basic economic problem is that the resources are limited but
wants are unlimited which forces us to make choices. Economics is the study of this
allocation of resources, the choices that are made by economic agents. An economy is a system which attempts to
solve this basic economic problem. There are different types of economies;
household economy, local economy, national economy and international economy
but all economies face the same problem. The major economic problems are (i)
what to produce? (ii) How to produce? (iii) When to produce and (iv) For whom
to produce? Economics is the study of how
individuals and societies choose to use the scarce resources that nature and
the previous generation have provided. The world’s resources are limited and
scarce. The resources which are not scarce are called free goods. Resources
which are scarce are called economic goods. Tags : Managerial Economics - The Fundamentals Of Managerial Economics
Last 30 days 1295 views