Unit 2 - Economic Essentials
Learning Target 3: I can explain the differences between are needs and wants.
Economics is the study of how you use your resources and make decisions to satisfy your needs and wants.
What is a need? What is a want? You are at the mall and see the "cutest outfit ever." You use your "resources" and call your parents and tell them you need to buy some new clothes because school is about to start and this is your first year in high school and you need to buy this outfit. Is this new outfit a need or a want?
Watch the video below to see if it is a need or a want. After watching this video write down 5 needs you have and 5 wants you have. Be prepared to share with the class and turn this paper in
Now that you realize you don't need this outfit but rather want it you are beginning to realize what businesses do. Businesses take goods and services that are wants such as cute outfits and make you believe they are needs. Think about this for a second, is your phone a need or a want? By definition it is a want and if we took it away from you would you survive? Absolutely! The marketers of the cell phone companies and providers made us all believe that we need to have cell phones and that we need to pay for email (text messaging) and we need lots of data to watch our shows or play our games on our phones. The reality is these are not a necessity but rather a want which is also called a luxury good.
Another way businesses turn wants into needs is by using scarcity. When Apple releases a new iPhone have you ever noticed they always sell out right away? Do you think this is because Apple underestimated consumer demand? Not at all...in fact Apple does this all the time in order to get consumers to feel they need that new phone. There is value for some to be the first person with the newest phone.
So what happens when consumers don't feel like they need a product anymore and is available everywhere? Unfortunately this is when product becomes discontinued and placed on the clearance rack.
Show What You Know: List 5 different needs and 5 different wants a business might have.
Make The Connection: Provide 3 other examples of when a business used scarcity to turn a want into a need.