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July 11, 2020 

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ECONOMIC SYSTEM: The assorted institutions that society uses to answer the three basic questions of allocation and address the fundamental problem of scarcity. Another, more popular term for economic system is economy. An economy, or economic system, is the structural framework in which households, businesses, and governments undertake the production and consumption decisions that allocate limited resources to satisfy unlimited wants and needs.

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SATISFACTION:

The process of successfully fulfilling wants and needs. This also goes by the technical economic term utility, and is essentially synonymous with more common words, such as fulfillment, well-being, and to some degree prosperity or happiness.
A basic fact of life is that people want and need goods and services to stay alive and to make that life more enjoyable. Satisfaction is the economic term that captures this wants-and-needs-fulfilling process. Satisfying wants and needs is the ultimate goal of economic activity, the end result of addressing the fundamental problem of scarcity. The attainment of satisfaction is also fundamental to life itself.

A Word or Two on Scarcity

The pursuit of satisfaction, which has guided humanity for as long as humanity has been humanity, is best seen in the context of scarcity. Scarcity exists because wants and needs are unlimited but resources are limited. People want more than they are able to obtain. People are persistently and perpetually motivated to fulfill their unlimited wants and needs. Doing so provides satisfaction, it makes people better off.

In prehistoric times, humans produced their own food, by hunting, fishing, or gathering fruits, to satisfy their hunger needs. In modern times, humans work at jobs to earn income that can be used to buy the food that they need. But whether modern or prehistoric, humans seek to satisfy that hunger need. While the modern economy is substantially more complex than that of the cave dwellers, the ultimate wants-and-needs-satisfying goal remains the same.

Wants or Needs

Satisfaction is derived from the fulfillment of both wants and needs.
  • Wants are generally considered psychological desires that provide enjoyment, but are not essential to life. The desire to collect celebrity autographs of movie star Brace Brickhead or baseball superstar Harold "Hair Doo" Dueterman would fall in the wants category.

  • Needs are thought of as physiological or biological requirements for continued existence. The requirement of nourishment achieved by eating one of Manny Mustard's Deluxe Club Sandwiches or a Gargantuan Taco (with jalapenos and sour cream) from Waldo's TexMex Taco World offers a prime example of a need.
From an economic perspective, it matters little whether a want or a need is fulfilled. Both generate satisfaction. Both motivate economic activity.

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Recommended Citation:

SATISFACTION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2020. [Accessed: July 11, 2020].


Check Out These Related Terms...

     | wants | needs | unlimited wants and needs | value |


Or For A Little Background...

     | scarcity | efficient | good | service | incentive | second rule of subjectivity |


And For Further Study...

     | consumer sovereignty | economic thinking | free lunch | opportunity cost | resource allocation | economic goals | seventh rule of complexity | assumptions, production possibilities | demand | demand price | market demand | utility | utility analysis | consumer demand theory | consumer surplus |


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