Human wants

Any resources that are not scarce are called free goods. The air that we breathe has no limit and so it is considered to be a free good. However, if population increases, fresh air may become scarce!

Needs and wants

All people have the same basic needs. We need food, clean water and shelter. However, people have unlimited wants. They want a new TV, they want a new phone, they want a new bed, they want everything. Unfortunately, as we mentioned earlier, resources are scarce, so if we keep allowing ourselves to buy everything we like, one day, resources will run out and we would have no new TV, no new phone, no new bed, no everything!

Consumption

We use up goods and services to satisfy our needs and wants. This is called consumption. When we eat we are consuming food, when we watch TV we are consuming electricity, when we go to school we are consuming the services of teachers. In conclusion, we are consuming when we read books, sit on chairs, sleep on beds, put money into a bank account, ask a policeman the time, listen to the radio and use up any other goods and services in order to satisfy our wants.