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In economics, a want is something that is desired. It is said that every person has unlimited wants, but limited resources (economics is based on the assumption that only limited resources are available to us). Thus, people cannot have everything they want and must look for the most affordable alternatives. Wants are often distinguished from needs.
The coincidence of wants (often known as double coincidence of wants) [1] [2] [verification needed] is an economic phenomenon where two parties each hold an item that the other wants, so they exchange these items directly. Within economics, this has often been presented as the foundation of a bartering economy. [3]
A common shortcoming in existing literature and discussions about human needs is that the fundamental difference between needs and their satisfiers either is not made explicit or is completely overlooked. It may have to do with the difference between human needs and the conventional notion of economic "wants" which are infinite and insatiable ...
James Stuart (1767) authored the first book in English with 'political economy' in its title, explaining it just as: . Economy in general [is] the art of providing for all the wants of a family, so the science of political economy seeks to secure a certain fund of subsistence for all the inhabitants, to obviate every circumstance which may render it precarious; to provide everything necessary ...
In other words, a need is something required for a safe, stable and healthy life (e.g. air, water, food, land, shelter) while a want is a desire, wish or aspiration. When needs or wants are backed by purchasing power, they have the potential to become economic demands.
The earlier term for the discipline was "political economy", but since the late 19th century, it has commonly been called "economics". [22] The term is ultimately derived from Ancient Greek οἰκονομία (oikonomia) which is a term for the "way (nomos) to run a household (oikos)", or in other words the know-how of an οἰκονομικός (oikonomikos), or "household or homestead manager".
Scarcity plays a key role in economic theory, and it is essential for a "proper definition of economics itself". [3] "The best example is perhaps Walras' definition of social wealth, i.e., economic goods. [3] 'By social wealth', says Walras, 'I mean all things, material or immaterial (it does not matter which in this context), that are scarce ...
In economics, a utility function is often used to represent a preference structure such that () if and only if. The idea is to associate each class of indifference with a real number such that if one class is preferred to the other, then the number of the first one is greater than that of the second one.