Basic Economics

Basic Economics for Grade 7

​Chapter 3

​Human Activities in Fulfilling Their Needs

by Asri Mills

​PART 1A

Understanding needs and wants (done)

Scarcity & Economic problem​

​Learning Objectives

To be able to explain the meaning of scarcity.

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​To be able to explain what is meant by economic problems.

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To be able to identify types of needs.

​So, What is scarcity?

Just think about our need for freshwater for drinking, taking a bath, you name it.

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​According to the National Geographic site, we only have 2.5% fresh water on earth, and only 1% of freshwater is easily accessible.

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Now, if nearly 8 billion of us live on this planet, can we have enough water for all of us???

​So, the point is?

​Scarcity happens when UNLIMITED needs and wants to exist, but we have very (repeat, VERY) LIMITED resources.

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​​The economic problem arises from the scarcity of the resource. Every economy faces a lack of resources because their wants are unlimited, and their resources (means) are limited. Therefore, the economic problem is the problem of economizing scarce resources. It means making the best use of the available resources.

PART 1B​

Types of Human Needs​

​Based on the level of intensity

• ​Primary needs --> MUST be fulfilled.

• ​Secondary needs --> additional needs fulfilled after primary needs are met --> not absolute, but most of

• ​Tertiary needs --> fulfilled after the two above, but you do not really need it --> depending on your financial situation.

​Based on the subject

• ​Individual needs --> you consume it alone, e.g. car, glasses.

• ​Collective needs --> you consume together with other people, e.g. schools, bridges, school bus, etc.

​Based on its nature

• ​Physical needs --> to 'satisfy' your body, e.g. food, medicine, drinks, vitamins, etc.

• ​Spiritual needs --> to 'satisfy' your soul (at peace, calm, etc.), e.g. books, entertainment (cinema), education, etc.

​Based on the time

• ​Now --> needs that need to be fulfilled urgently, e.g. medicine if you are sick.

• ​Future--> to 'satisfy' your soul (at peace, calm, etc.), e.g. books, entertainment (cinema), education, etc.