Needs and Wants

Introduction

In a circumstance of shortage or insufficiency, is the dilemma between what we want and what we need. It is not only in the circumstance of insufficiency that we experience this dilemma but also in our daily lives. Our parents for example in their simple presence in the market, they experience this dilemma. Should I buy a commercial rice at 46 pesos a kilo or should I just buy an NFA which is a lot cheaper at 38 pesos? For students for example in simply buying school things, should one ought to buy a notebook with a price tag of 10 pesos or a another with a 35-peso tag? Or for instance when our parents just sent our allowance, will one ought to sacrifice his food allowance for a new pair of shoes or a new T-shirt?

These are just some of the instances that we encounter in our daily live where we practice the dilemma between needs and wants. But first, what are wants and what are our needs? Let us find out for ourselves for knowing the difference between them makes us wiser in our daily lives. As an author said, “For the purpose of spending and saving money wisely, every person must know the difference between needs and wants.”

Task

Your first task is to be able to define wants and needs
Second is that you should be able to differentiate needs and wants
Third is that you should be able to identify what are the needs and what are the wants in each circumstance given from four case studies that will be provided
Fourth is that you should be able to explain why you identified something as a need or as a want based on the case studies provided
Lastly you should be able to give the correct decision if you were put on the shoes of the people in the case studies

Your final work would be an activity identifying which are needs and wants in a four case studies provided. You must be able to identify, justify and put yourself as the people in the case study and carefully decide the right decision.

Process

What are needs? Needs point out the something you must have for survival. By the term needs, we mean those requirements which are extremely necessary for a human being to live a healthy life. They are personal, psychological, cultural, social, etc that are important for an organism to survive. (Surbhi S. 2014)

What are wants? Wants refers to something which is good to have, but not essential for survival. In economics, wants are defined as something that a person would like to possess, either immediately or later. Simply put, wants are the desires that cause business activities to produce such products and services that are demanded by the economy. They are optional, i.e. an individual is going to survive, even if not satisfied. Further, wants may vary from person to person and time to time.

Comparison Chart
Basis for Comparison	Needs	Wants
Meaning	Needs refers to an individual's basic requirement that must be fulfilled, to survive.	Wants are described as the goods and services, which an individual like to have, as a part of his caprices.
Nature	Limited	Unlimited
What is it?	Something you must have.	Something you wish to have.
Represents	Necessity	Desire
Survival	Essential	Inessential
Change	May remain constant over time.	May change over time.
Non-fulfillment	May result in onset of disease or even death.	May result in disappointment

Key Differences Between Needs and Wants

The following points are noteworthy so far as the difference between needs and wants are concerned:

The term ‘needs’ is defined as an individual’s basic requirement that must be fulfilled, in order to survive. Wants are described as the goods and services, which an individual like to have, as a part of his caprices.
Individual needs are limited while his wants are unlimited.
Needs are something that you must have, to live. On the contrary, wants are something that you wish to have, so as to add comforts in your life.
Needs represents the necessities while wants indicate desires.
Needs are important for the human being to survive. As against this, wants are not as important as needs, because a person can live without wants.
Needs are those items, that are required for life and does not change with time. As opposed to, wants are those items, that are desired by an individual either right now or in future. Therefore, wants might change over time.
As needs are essential for life, non-fulfillment may lead to illness or even death. In contrast wants are not essential for living and so non-fulfillment, does not have a great impact on a person’s life, however, disappointment may be there.

CASE STUDY

After reading please try to answer the following question basing on the scenarios provided:

Case Study 1: Casey is preparing to leave for college in the fall. She lives in New York, but will be going to school in California, so she is planning on buying a car to get her there. She wants to buy something reliable, so she is deciding between a new car that will cost $17,000 with zero miles and a navigation system and a three-year-old car with 7,000 miles and no navigation system for $12,000. She has $10,000 in savings that she will use for the purchase and will take out a loan for the remaining amount.
   What are the wants? __________________________________________________________________
   What are the needs?    ___________________________________________________________________
   What decision would you make and why?_____________________________________________________

Case Study 2: Tom has been saving for a new laptop for the past six months. He’s done his research and found a model that experts say will more than meet his needs. But new, it costs $3,000. He also found a refurbished version of the same computer with all of the same features online for $1,500. The refurbished laptop comes with a warranty and Tom bought a refurbished portable music player from the same company with no problems. Tom’s third option is a brand new laptop that costs $1,800 and has all of the features he needs but not all of the ones he wants.

   What are the wants? ___________________________________________________________________
   What are the needs?    ___________________________________________________________________
   What decision would you make and why?___________________________________________________________________

Case Study 3: Stephanie received $500 from her grandparents for her high school graduation. She’s been longing to buy a new watch and update her wardrobe because she’s starting a new job in two weeks, but next month she’s moving out on her own and will need to pay three months rent in advance, which totals $1,500. If she uses the money to buy the watch and clothes, she thinks she can save enough money from her new job to pay for rent, but she’s not sure.
     What are the wants? ___________________________________________________________________
   What are the needs?    ___________________________________________________________________
   What decision would you make and why?___________________________________________________________________

Case Study 4: Michelle’s been invited to go to a three-day concert with her friends. The only catch is that it’s a 9-hour drive, and traveling for an entire weekend means she’ll need lots of cash. She estimates that gas, food, tickets and camping will cost around $400. She has a car payment of $250 coming up and her $89 cell phone bill is due at the end of the month. She also needs to buy her mom a birthday gift, which she thinks will cost $50. She has $700 in savings.
     What are the wants? ___________________________________________________________________
   What are the needs?    ___________________________________________________________________
   What decision would you make and why?________________________________________________________________-__

Evaluation

Case Study 1:
Casey is preparing to leave for college in the fall. She lives in New York, but will be going to school in California, so she is planning on buying a car to get her there. She wants to buy something reliable, so she is deciding between a new car that will cost $17,000 with zero miles and a navigation system and a three-year-old car with 7,000 miles and no navigation system for $12,000. She has $10,000 in savings that she will use for the purchase and will take out a loan for the remaining amount.

What are the wants? A new car with zero miles and a navigation system and an old car with 7,000 miles and no navigation system.
What are the needs? A car to get Casey from New York to California
What decision would you make and why? I would go with the older car because it’s cheaper and I would be able to save for it easier than I would with the new car. Basically all I need is a car to get me across the country and then maybe I’d be able to buy a new one later on.

Case Study 2:
Tom has been saving for a new laptop for the past six months. He’s done his research and found a model that experts say will more than meet his needs. But new, it costs $3,000. He also found a refurbished version of the same computer with all of the same features online for $1,500. The refurbished laptop comes with a warranty and Tom bought a refurbished portable music player from the same company with no problems. Tom’s third option is a brand new laptop that costs $1,800 and has all of the features he needs but not all of the ones he wants.

What are the wants? A new laptop that will exceed Tom’s needs, a refurbished laptop that’s the same as the new one, and a brand new laptop that has all the needs, but not all the wants.
What are the needs? A laptop
What decision would you make and why? I would choose the refurbished laptop that only costs $1,500 because it’s cheaper than the new one, yet it has all of the same features and I wouldn't want to pay more for a laptop that has what I need, but not what I want.

Case Study 3:
Stephanie received $500 from her grandparents for her high school graduation. She’s been longing to buy a new watch and update her wardrobe because she’s starting a new job in two weeks, but next month she’s moving out on her own and will need to pay three months’ rent in advance, which totals $1,500. If she uses the money to buy the watch and clothes, she thinks she can save enough money from her new job to pay for rent, but she’s not sure.

What are the wants? A new watch and new clothes
What are the needs? Three months’ rent that is $1,500.
What decision would you make and why? I would prioritize and save about 15% of my money for the new clothes and watch and spend the rest on the rent because then I would be able to do things that I want to do and still keep up with mandatory payments.

Case Study 4:
Michelle’s been invited to go to a three-day concert with her friends. The only catch is that it’s a 9-hour drive, and traveling for an entire weekend means she’ll need lots of cash. She estimates that gas, food, tickets and camping will cost around $400. She has a car payment of $250 coming up and her $89 cell phone bill is due at the end of the month. She also needs to buy her mom a birthday gift, which she thinks will cost $50. She has $700 in savings.

What are the wants? The three-day concert.
What are the needs? Car payment, cell phone bill, and mother’s birthday present.
What decision would you make and why? I would go to the concert and work extra hours afterwards to help myself save for the rest of my payments because I wouldn’t know when the next time I got to see a concert was and I don’t want to miss out on that experience.

ANALYTICAL ESSAY RUBRIC

	3 - Exemplary	2.5 - Satisfactory	2- Below Satisfactory	1 - Unsatisfactory
Key Question,	--CLEARLY defines the issue or problem;	--CLEARLY defines the issue;	--Defines the issue POORLY;	--FAILS to CLEARLY define the
Problem, or	--ACCURATELY identifies the core issue;	--ACCURATELY identifies the core issue;	--Not entirely ACCURATE about core issue;	issue or problem;
Issue	--Appreciates DEPTH and BREADTH of	--Does NOT fully explore DEPTH and	--SUPERFICIALLY/NARROWLY explores	--Does NOT recognize and/or
	issue or problem;	BREADTH of problem;	SOME core issues;	explore the core issue
Purpose and	--CLEARLY and EXPLICITLY states	--INDICATES purpose of essay, but is NOT	--VAGUELY INDICATES purpose of essay,	--Does NOT INDICATE, explicit or
Thesis/Argument	purpose of essay;	EXPLICIT;	but is NOT explicit	otherwise purpose of essay
	--CLEARLY INDICATES thesis/argument	--INDICATES thesis/argument	--VAGUELY INDICATES thesis/argument	--Does NOT INDICATE
				thesis/argument
Concepts	--IDENTIFIES and ACCURATELY	--IDENTIFIES and ACCURATELY	--Identifies SOME (not all) key concepts;	--Does NOT IDENTIFY key
	explains the relevant key concepts;	explains the relevant key concepts,	--Does NOT FULLY and ACCURATELY	concepts or
	--APPROPRIATELY uses relevant key	--but SOMETIMES uses concepts	explain each identified concept	--Identifies but FAILS to use key
	concepts throughout the essay;	INAPPROPRIATELY;	--Use of concepts is SUPERFICIAL and/or	concepts or
	--CONSISTENTLY uses the relevant key	--or uses concepts INCONSISTENTLY	INACCURATE at times	--Uses key concepts
	concepts throughout the essay			INAPPROPRIATELY throughout
				the essay;
Information to	--Uses SUFFICIENT, CREDIBLE,	--Uses CREDIBLE and RELEVANT	--Gathers SOME CREDIBLE information,	--Relies on INSUFFICIENT,
Support Thesis/	RELEVANT information from sources to	information, but needs some additional	but not enough; SOME information may be	UNRELIABLE, or IRRELEVANT

Interpretations,	--Uses EVIDENCE and REASON to come	--Uses EVIDENCE and REASON to obtain	--Does follow SOME EVIDENCE to	--Uses SUPERFICIAL or
Implications,
--Identifies the most SIGNIFICANT, IN-	--Identifies SIGNIFICANT implications and	--Identifies VALID implications and	--Ignores SIGNIFICANT
Consequences,	DEPTH, and INSIGHTFUL implications	consequences, but LACKS some DEPTH	consequences; but misses SIGNIFICANT	implications and consequences of
	and consequences of the reasoning;	and INSIGHT;	implications and/or implications grossly	reasoning
	--Implications identified are DEEP rather	--Implications identified are VALID, but	LACK DEPTH and INSIGHT;	--Implications are INVALID
	than superficial	some are SUPERFICIAL;	--Implications identified are SUPERFICIAL

Overall	--Demonstrates a completely CLEAR,	--Demonstrates a CLEAR and ACCURATE	--Demonstrates SOME understanding of the	--Conveys an INACCURATE
Assessment	ACCURATE, and IN-DEPTH	understanding of the subject, but needs to	subject at a SUPERFICIAL level	understanding of the subject at any
	understanding of the subject	FURTHER elucidated DEPTH of	--Has a basic or mediocre understanding of	level
	--Has mastered the content material	understanding;	the content material	--Has limited or no understanding of
		--Has a strong grasp of the content material		the content material

3 = Thinking is exemplary, skilled, marked by excellence in clarity, accuracy, precision, relevance, depth, breadth, logicality, and fairness

2.5 = Thinking is competent, effective, accurate and clear, but lacks the exemplary depth, precision, and insight of a 4

2 = Thinking is inconsistent, ineffective; shows a lack of consistent competence: is often unclear, imprecise, inaccurate, and superficial

1 = Thinking is unskilled and insufficient, marked by imprecision, lack of clarity, superficiality, illogicality, and inaccuracy, and unfairness

Conclusion

With the above discussion, on these two concepts of economics, it concluded that needs and wants are separate forces, that compels actions for satisfaction. If needs are not met on time, the survival of a person is at stake whereas wants are something which a person is craving for, that does not challenge a person’s survival if not satisfied.

So, needs can be distinguished from wants on the basis of their level of importance. Hence, the distinction is between what is required and what is desired.

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Credits

Teacher Page

Needs and Wants

CASE STUDY

BY: Marvin T. Dailay