Our basic needs are simple, but our additional individual wants are often very complex. Commodities of different kinds satisfy our wants in different ways. A banana, a bottle of medicine and a textbook satisfy very differents wants. The banana cannot satisfy the same wants as the textbook.

This characteristic of satisfying a want is known in economics as its 'utility'. Utility, however, should not be confused with usefulness. For example, a submarine may or may not be useful in time of peace, but it satisfies a want. Many nations want submarines. Economists say that utility determines 'the relationship between a consumer and a commodity'.

Utility varies between different people and between different nations. A vegetarian does not want meat, but may rate the utility of bananas very highly, while a meat-eater may prefer steak. A mountain-republic like Switzerland has little interest in submarines, while maritime nations rate them highly.

Utility varies not only in relation to individual tastes and to geography, but also in relation to time. In wartime, the utility of bombs is high, and the utility of pianos is low. Utility is therefore related to our decisions about priorities in production-particularly in a centrally-planned economy. The production of pianos falls sharply in wartime.

The utility of commodity is also related to the quantity which is available to the consumer. If paper is freely available, people will not be so interested in buying too much of it. If there is an excess of paper, the relative demand for paper will go down. We can say that the utility of a commodity therefore decreases as the consumer's stock of that commodity increases.

Money motivates most employees to perform at satisfactory level and many perform at superior levels, when it is used properly. Money motivates in almost mysterious ways. First of all, for most people it is not motivator for its own sake, but rather for what can be bought with it. With money person can usually purchase good and service that do satisfy lower level needs-physiological needs. If money can be provided for future contigencies through saving, pension plans, and insurance, it will help to satisfy security need. And money can help to satisfy social need as well.

In reality, money can be a satisfier for higher level needs, by serving as tangible symbol of an intangible reward. For example, a person who seeks to satisfy esteem needs may value a raise in salary as a symbol of increased status. The symbolic value may be more important than the increased buying power represented by the raise. Considering again the special case of the individual with high need for achievement, money can serve as an objective mechanism for measurement of performance. Commissions for the sales person, prize money for professional athlete, and profit for enterpreneur can provide the feedback desired by high achievers. In such cases, the money it self may not be as important to the individual as the satisfaction of earning it. Our society normally looks more favoraby on the person who makes a great deal of money than it does on one who makes little.

To the person who seeks seft actualization, money is probably a symbol of achievement. Becoming all that one is capable of becoming includes the financial demonstration of achievement.

There is a problem, however, in relying on money as reward for upper level of the need hierarchy. The problem is that larger and larger quantities of money are generally required to yield the same degree of satisfaction one progress up the hierarchy.

Money is more of a short motivator than it is a long term motivator. But make no mistake about it, money motivates. And if current economic trends continue, it will again become a primary motivator for most of the population.

Finally, the process may or may not continue according to the impact of the process on the individual's self -image. The evidence suggests that no simple formula will give a totally accurate picture of the relationship between self-image and performance. When the process maintains or enhances the individual's self-image, performance would be expected to continue at present levels or to increase. When the process lowers the individual's self-image, one would expect the level of perfomance to decline.

Bananas are a typical example of perishable goods. By 'perishable' we mean goods which cannot be stored for any length of time without going bad. Most foodstuffs are in the perishable category. Such goods are offered for sake as quickly as possible, and so the supply of perishables and the stock of perishables available at any time are usually the same in quantity.

This is not true in the case of non-perishable goods like coal, steel and cars, which do not deteriorate easily. The supply of cars on the market may not be the same as the actual stock of cars in the factories. Economists talk about the Law of Supply, in which a rise in prices tend to increase supply, while a fall in prices tends to reduce it. If prices rise for a particular commodity, the ris will of course encourage producers to make more. On the other hand, if prices fall either locally or throughout the world, producers will reduce production. This can result in serious difficultties for many producers, and may cause them to go out of business completely. Over-production of any commodity can also create difficulties, beause it can lead to a glut on the market, which may cause prices to fall sharply.

Supplies of many commodities can generally be adjusted to suit market conditions. This means that changes in prices lead to changes in the quantity of a particular commodity which is made available to consumers. Household goods and furniture belong to this category. In such instances supply is said to be 'elastic', because it can be increased or decreased rapidly in response to market prices.

Economics is the study of how a society choose to use scarce resources to produce goods and services and to distribute them to people for consumption. A nation's resources consist of natural, capital and labor resources.

Natural resources are provided by nature in limited amounts; they include crude oil, natural gas, mineral, timber and water. Natural resources must be processed to become a product or to be used to produce other goods and services. For example, trees must be processed into lumber before they can be used to build homes, shopping malls, and hospitals.

Capital resources are goods produced for the purpose of making other types of goods and services. Some capital resources are called current assets. They have a short life and are used up in the production process. These resources include fuel, raw materials, paper and money. Long-lived capital. Examples include factory building, machinery, and means of transportation.

Labor resources represent the human talent. To have value in the labor force individuals must be trained to perform either skilled or semiskilled work. For example, the job of manager requires extensive training, whereas only minimal training is needed to operate a service station's gas pump.

Goods and Services
The resources are useh to produce goods and services that will satisfy people's need and wants. Goods are tangible items made by businesses, such as shoes and cars. Services are intangible items, things that can't be held, touched, or seen, provided by organizations for their customers. For example, medical care and hair cutting. Needs are goods and services people must have simply to exitst, such as food, clothing, and shelter. Wants, on the other hand, are things they would like to have but do not absolutely need for survival. For example, video recorder, cassettes and luxury vacations. Goods and services are produced and designed to satisfy wants of consumers.

Resource Allocation
The process of choosing how resources will be used to meet people's need and wants is allocation. All countries face the economic problem of limited resources and unlimited wants. Because we live in a world in which the quantity of all resources is limited, we must make choices about how to use these scarce resources. We have a basis for choosing the way of using and allocating the resources to satisfy our wants and needs.

The allocation involves the distribution of goods and servives to consumer. Allocation also involves an exchange (e.g. money, goods, time, service) between a business and consumer. The business earn a profit ant the consumer is satisfied with the good or service. The exchange provides mutual benefit.

The term 'market' , as used by economist, is an extension of the ancient idea of a market as a place where people gather to buy and sell goods. In former days part of a town was kept as the market or marketplace, and people would travel many kilometres on special market-days in order to buy and sell various commodities. Today, however, market such as the world sugar market, the gold market and the cotton market do not need to have any fixed geographical location. Such a market is simply a set of conditions permitting buyers and sellers to work together.

In a free market, compettion takes place among seller of the same commodity, and among those who wish to buy that commodity. Such competition influences the price prevailing in the market. Prices inevitably fluctuate, and such fluctuations are also affected by current supply and demand.

Whenever people who are willing to sell a commodity contact people who are willing to buy it, a market for that commodity is created. Buyers and sellers may meet in person, or they may comunicate in some other way : by letter, by telephone or through their agents. In a perfect market, communications are easy, buyers and sellers are numerous and competition is completely free. In a perfect market there can be only one price for any given commodlty : the lowest price which sellers will accept and the highest which consumers will pay. There are, however, no really perfect, and each commodity market is subject to special conditions. It can be said however that the price ruling in a market indicates the point where supply and demand meet.

Economics affects all of us, whether we understand how it does this or not. Economics is a science that deals with the satisfaction of human wants through the use of human wants through the use of scarce resources of production. Since all resources are limited, there never are enough to give individuals they want. The economics system of country must deal with the problem of allocating these scare resources among the competing parties who want them.

An economic system results from the way in which people organize natural resource, labor, and management skill to produce and distribute the things they want. In many ways an economic system makes conflicting demands upon us. It may dictate certain behavior, such as getting a job to provide income, and it may then change the demand for the a good example- years ago there was little demand. At some point in the future we can be sure the demand for engineers will decline again. Individual workers must look out for their own interest-yet may have to join other workers to present a united front to get what they want. The ideal economics system rewards individuals achievement-at the same time it encourages everyone to work together for the benefit of all.

Money is not only a means of exchange but is also a means of measuring the value of men's labour. In economic theory, 'labour' is any work undertaken in return for a fixed payment. The work undertaken by a mother in caring for her children may be hard work, but it receives no fixed payment. It is not therefore labour in the strict economic sense.

As a scientist, the economist is interested in measuring the services which people render to each other. Although he is aware of the services which people provide for no financial reward, he is not conerned with these services. He is interested essentially in services which are measurable in terms of money payments of fixed and regular nature. In economics, money is the standard by which the value of things is judged. This standard is not a religious or subjective standard, but an objective and scientific one.

Human labour produces both goods and services. the activities of a farmworker and a nurse are very different, but both are measurable in terms of payment received. Labour in this sense in not concerned with distinctions of social class, but simply with the payment of wages in return for work. When we talk about 'the national labour force'. However, we are thinking of all those people who are available for work within the nation, i.e. the working population.

It should be noted that any person engaged in private business is not paid a fixed sum for his activities. He is self-employed and his activities are partly those of an employer and partly those of an employee. If however he employee provides labour in return for payment. He receives his wages, while his employer receives the surplus (large or small) from the whole business. This surplus is the reward of private enterprise and is known as 'profit'.