The problem of economic choice

The basis of human life is the satisfaction of his needs. Needs - is the need or lack of something necessary to sustain human life, social groups and society. Without addressing they cannot exist any individual or society. The following types of needs:

• physiological (food, clothing, housing, etc.);

• the need for security (protection from enemies, poverty, etc.);

• social (interaction with people);

• the need to respect the (authority, position);

• The need for self-development (improvement of human capabilities).

Good - it means (things and services) to meet the needs. Some of them are by nature in abundance, but the majority of them have the property rarity. Uncommon goods express lack at the moment to meet the ever growing needs.

Every good thing has a useful, but not all - value. Value is only the benefits that are rare compared to the needs. For example, water in the river from the point of view of the person who wants to drink, has no value, and is only useful. At the same time the water in the desert is the highest form of utility - value.

Scientists are trying to measure the value, enter the term "marginal utility." Marginal utility is the copy of the material goods that satisfies the least urgent need.

Since the benefits include people in a particular sphere of their activity - the economy, through which to some extent overcome the current scarcity of goods, they are called economic goods.

Thus, the variety of goods can be divided into two classes:

• Natural products of nature (land, forest, river, air, etc.);

• Economic benefits - the result of a creative production of human activity.

Classification of benefits of diversity: good lower (consumer goods) and higher order (means of production) to tangible and intangible benefits.

Production of goods intended to meet the needs of long historical path of development from simple foraging by elementary tools to use modern technology.

A quantitative approach to the economy to determine how production is able to meet the needs. You need to know the production capacity of the enterprise. Usually, production capacity is not always enough, and then resort to the alternative choice of needs. In meeting the needs of their people everywhere are going to have to choose alternative ways to use the limited economic benefits.

Consider this a classic example of the phenomenon of production guns and butter. Oil production in relation to production of guns, it will act as an alternative to it costs.

If the costs of factors of production are made only for oil, the volume of its production will increase. Accordingly will be a lost opportunity for the production of guns. However, the issue of the production of certain products is not mutually exclusive on a "or just guns, or just oil". In fact, created and many other products. Therefore, the choice of economic activity is a necessary measure to use these factors to produce a particular product in the right quantity to meet the diverse needs of people.