Understanding Scarcity, Needs, and Economic Science

Scarcity and Conflicting Needs

Economic science addresses the conflict of allocating scarce resources to satisfy unlimited human needs.

The fundamental problem is economic scarcity: the limited availability of resources. This includes poverty and the lack of basic necessities.

A need is the desire for sufficient means to alleviate feelings of dissatisfaction, a sense of lacking something and the desire to fulfill it.

Types of Needs

Primary needs are essential for human survival. Secondary needs are those felt after primary needs are met.

Safety needs relate to physical protection, order, and security. Belonging and love needs involve integration and acceptance within a social group. Esteem needs are related to social valuation and recognition. Finally, the need for self-actualization refers to the pursuit of personal development.

Goods and Their Classification

Goods are the means to satisfy needs.

Classification of Assets

Capital goods or intermediate goods are integrated into productive processes established to produce other goods.

Macroeconomics and Microeconomics

Microeconomics

Microeconomics focuses on problems related to individual economic decision-makers. Its basic tools are supply and demand. The goal of microeconomics is the efficient allocation and use of resources through pricing mechanisms in different markets.

Macroeconomics

Macroeconomics studies the determination of aggregate demand, production levels, employment, and prices in an economy, as well as their changes over time.

What is the Economy?

Political economy studies the problems of insufficient resources to meet theoretically infinite purposes. It analyzes conflicts of interest and proposes measures for action.