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The study of the choices people make in an effort to satisfy their wants and needs is called economics. Wants and needs refer to people’s desires to consume certain goods and services. In economic terms, a good is a physical object that can be purchased. A record, a house, and a car are examples of a good. A service is an action or activity done for others for a fee. Lawyers, plumbers, teachers, and taxicab drivers extend services. The term product is often used to refer to both goods and services.The people who wish to buy goods and services are called consumers and the goods that they buy are called consumer goods. The people who make the goods and provide services that satisfy consumers’ requirements and needs are called producers.Economists generally classify as needs those goods and services that are necessary for survival. Food, clothing, and shelter are considered to be needs. Wants are those goods or services that people consume beyond what is needed for survival.The need for making choices arises from the problem of scarcity. Scarcity exists because people’s wants and needs are greater than the resources available to satisfy them. Thus people must choose how best to use their available resources to satisfy the greatest number of wants and needs.
