The benefits, needs, resources - Microeconomics in questions and answers

1.7. Good, needs, resources

Good (goods) - means of satisfying needs. They can be gifted - what is given by nature (land, forests, natural resources, air, water in rivers, seas, etc.), and economic - what is extracted or created by human labor (cultivated land, planted forest, extracted oil, machinery, machinery, equipment, roads, bridges, services, etc.).

Classification of goods is shown in Fig. 1.1.

Classification of goods

Fig. 1.1. Classification of benefits

The benefits can be divided by a number of characteristics.

On the material (material) feature distinguish:

o material, or property, good - a commodity (thing), having the ability to satisfy some human need and exchange for other goods or money;

o Non-material or non-material benefit is a service (car repair, doctor's appointment, teacher's work, legal advice, etc.), which has the same properties as the goods.

There is only one difference between goods and services: the goods are first produced and then consumed, and the service is consumed directly at the time of its production (Figure 1.2).

Distinction of goods and services

Fig. 1.2. Product and Service Differences

In today's economy it is difficult to determine what is more important: material or non-material good, i.e. product or service. Often they are so connected that one can not exist without the other, for example, a person can not do without information, medical services.

The good has two properties: the consumer value (the ability to satisfy any human need) and the value (the ability to exchange for other goods). However, there is the concept of anti-favor - goods with negative utility (for example, alcohol, cigarettes, drugs, poor-quality products).

According to the consumer, the benefits are divided into:

o production goods, or products that meet the needs of production: working buildings and structures, machinery, equipment, etc .;

o articles of individual consumption, or goods that satisfy personal needs. In turn, consumer goods are divided into basic necessities (food, clothing, household items, etc.) and luxury goods that satisfy the needs of rich people.

On the basis of substitution and addition among the benefits are allocated:

o interchangeable goods (substitute goods), or substitutes - goods that can be replaced by others without harming the consumer (for example, tea and coffee, cars and airplanes). For these benefits, there is a direct relationship between the price of one of them and the demand for the other, i.e. a decrease (increase) in the price of one good causes a decrease (increase) in demand for another good;

o complementary goods (complementary goods), or complementary, in the process of consumption complementing each other (for example, car and gasoline). For these benefits, there is an inverse relationship between the price of one of them and the demand for the other, i.e. a decrease (increase) in the price of one good causes an increase (reduction) in demand for a complementary good.

Depending on ownership or property, they are distinguished:

o private good, accessible to one subject, the use of which excludes the possibility of consumption by other subjects (for example, any thing belonging to a particular person or firm);

o The public good, consumed collectively by the whole population, regardless of whether people pay for it or not. Purely the public good is characterized by two properties: it is necessary to all and always. Such properties are, for example, information, roads, bridges, electricity, national defense.

From the production standpoint:

o final goods - economic benefits purchased for final consumption;

o intermediate goods, which are used in production (for example, steel as an intermediate for engineering).

In the market economy there are so-called Giffen's blessings (Giffen good) - goods that are spent most of the budget of low-income consumers. Other things being equal, the demand for such goods changes in the same direction as the price, since the income effect exceeds the substitution effect.

The benefits are created to meet human needs.

Needs (in the broad sense of the word) - people's desire to acquire and use those benefits that bring them usefulness.

The common for all kinds of needs is their direct dependence on human activity in general and production in particular. The interrelation of need and production is that needs, being an active beginning, influence the conditions of existence, thereby determining their specificity, stimulating certain modes of activity.

Economic needs are needs mediated by industrial relations. They are divided into personal and production (Figure 1.3).

Structure of production and personal needs

Fig. 1.3. Structure of production and personal needs

Consumables are different for long-term and short-term items, as well as for luxury goods.

The system of needs other than material includes social needs - in labor, education, health care.

In a market economy, economic needs are mediated by money and take the form of demand. This, above all, refers to personal needs. Public needs, i. needs in public goods, are realized partially outside demand - through social functions of the state (for example, the use of an insurance policy in the health care system).

Any economic need is the result of real contradictions in social production. It expresses the discrepancy between economic needs and the existing productive forces. The resolution of these contradictions ultimately leads both to the growth of the productive forces and to the satisfaction of ever-increasing needs.

As one needs meet, a person develops others, which allows economists to argue that needs are endless, that is, at this stage of their development they can not be fully satisfied. Moreover, with the passage of time, as a result of the emergence of new benefits, needs change. The ultimate goal of any economy is to satisfy these diverse needs. But this can be done if the economy has sufficient resources.

What determines our needs, our desires? What needs are more important for us, priority? This question was answered by A. Maslow, an American sociologist of United States origin who built the pyramid of human needs according to the degree of their priority (the pyramid of needs for A. Maslow). According to his theory, a person will not need to satisfy the needs of the higher degree (spiritual), until he has satisfied the needs of a lower level (physiological).

Needs can be met if the economy has certain resources.

Resources are everything that is used to produce and sell products and services.

Resources, or production factors, are subdivided into (Figure 1.4):

Material resources - land (natural wealth) and capital

human resources - labor and entrepreneurial ability (entrepreneurship).

thematic pictures

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