Mans's Basic Economic Problem

MAN’S BASIC ECONOMIC PROBLEM

Man’s basic economic problems arise out of the use of resources to satisfy human wants. It is very glaring that every society regardless of the types of economic system adopted is confronted with some fundamental economic problems.

SCARCITY

Scarcity can be defined as the limited in supply for all the resources needed to produce our numerous wants. The problem arises over which of these wants, goods or services should be produced to satisfy the insatiable desire of human being. As it is known that the wants of human being are many, these can range from basic need to hyper order needs. The resources within the reach of an individual would determine the quantity and quality of goods and services to be produced as a result, the concerned individual will be in a state of dilemma as regard what to produce.

Conclusively, the concept implores that commodities needed and desired by the consumer are in supply relative to demand for them and consequently they cannot go round the people that want them. This also leads to another economic problem choice.

CHOICE

As a result of limited resources, the consumer satisfy their unlimited desire, therefore, they have to select among the available resources within their reach.
These resources are the scarce relative to their demand. It is as a result that this made the study of Economics very essential in order to find alternatives of these scarce resources. Individual societies and government face this problem. Human beings have to choose the most pressing ones and leave others that are less important relative to scarce resources. Decision to choose certain things or the other can be influenced by many factors such as individual consumer, business organization, government officials, labour unions and so on.

SCALE OF PREFERENCE

Scale of preference can be defined as a list of individual wants in order of their relative importance. This is when individual wants are being organized in ladder-lifestyle. This will make it easier for choice to be made since human wants are insatiable and available resources used in meeting these needs are limited and cannot satisfy all human wants.
Human beings have no option than to rank these needs in descending order of importance to the individual.

OPPORTUNITY COST

Opportunity cost can be defined as an alternative forgone. This is the sacrifice one makes in other to get something else. It is the satisfaction of one want at the expense of another want. Anyanwuocha (1993) defined opportunity cost as a real cost or true cost. He explained further that the concept of opportunity cost is used to explain ‘cost’ in terms of forgone or sacrifice alternatives. The economist will refer to the amount of money paid for commodity as its ‘money cost’ but not the ‘real cost’ of a choice made.

As a result of scarcity of resources and unlimited wants, choice is frequently made between different alternatives. In order to choose anything some other wants must be sacrificed forgone.
Opportunity cost is also applicable in the expenditure of time. If one is faced with a choice between attending a birthday party and attending a film show, one cannot attend both if they are taking place at the same time, if one attends the birthday party, the real cost is the film show one did not attend.

THE BASIC NEEDS OF MAN

The major basic needs of man are food, shelter and clothing. Man tries to attain these basic needs so as to live comfortably in his environment.

1. Food: food is derived from the soil. Food could be described as something that man, animal and plant eat in order to grow and live. Food could be in liquid form like tea, coffee and so on. It could also be in solid form such as yaw, cashew, plantain, pineapple, meat, sea foods, vegetable, fruits and the likes.
   the early man initially ate his food raw but later discover fire and started cooking his food. The food of the early man was restricted. He ate roots, seeds, wild berries. The modern man has made progress in his choice of food.

2. Shelter: man needs to rest after a day’s work or job. He needs a shelter to achieve this. Man cannot live in the hole, in the cave, on branches of trees and in other unhealthy places, and partly because of the necessity of defence and the realization that they need permanent shelter, the primitive men started to live together and built tents and huts for shelter.

3. Clothing: the holy scriptures maintain that adam and eve that were created in the garden of eden were without clothes, in other words, they were naked. In the same vein, historians believed that early men initially wore leaves as clothe.
   Eventually, when they started domesticating animals, they killed some of the animals for food and use their skins as clothe. As civilization grew, man improved on his clothing habits. He cultivated cotton to have fabrics for cloth weaving. The industrial revolution which was a product of the eighteenth century further accelerated the improvement in man’s clothing. The spinning jenny which was invented by James Hargreaves in England 1764 aided textile manufacturing. The Spinning Jenny enabled individual to spin about eighteen threads at the same time.

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