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MARGINAL UTILITY AND DEMAND: An explanation of the law of demand and the negatively-sloped demand curve can be found in the analysis of marginal utility and especially the law of diminishing marginal utility. This explanation rests on two propositions. One, the law of diminishing marginal utility means that the marginal utility obtained from consuming a good declines as the quantity consumed increases. Two, the marginal utility of a good underlies the demand price that buyers are willing and able to pay for a good. When combined, these two propositions indicate that the demand price buyers are willing and able to pay for a good declines as the quantity demanded (and consumed) increases. And this is the law of demand.
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                           WANTS: The psychological desires which make life just a little more enjoyable, but which are not biological necessities for life. Psychological wants are often contrasted with physiological needs that make life more enjoyable, but are not essential for existence. Satisfaction is achieved by fulfilling wants. The pursuit of satisfaction, the fulfillment of wants (as well as needs), motivates human behavior, including all types of economic behavior--buying, selling, producing, and consuming.Consider a few examples. - Duncan Thurly, a normal human being, wants a late-night snack. He sees a commercial for Hot Mamma Fudge Bananarama Ice Cream Sundaes on late-night television. Duncan is not particularly hungry, he does not need food to continue his mortal existence, but he wants, he desires, he absolutely craves a Hot Mamma Fudge Bananarama Ice Cream Sundae. Within minutes he has driven to the Hot Mamma Fudge Ice Cream Shoppe to purchase a Hot Mamma Fudge Bananarama Ice Cream Sundae. Duncan's psychological desire to consume a Hot Mamma Fudge Bananarama Ice Cream Sundae has triggered more economic activity.
- Duncan Thurly also desires a little entertainment. After consuming his tasty Hot Mamma Fudge Bananarama Ice Cream Sundae, Duncan decides to take in a midnight showing of the classic Marx Brothers comedy, Duck Soup. Duncan does not need to see a midnight showing of this movie, but watching it makes him happy. He buys a ticket and watches the movie. He feels better, more satisfied after the movie than before. Duncan's psychological desire for entertainment has triggered economic activity.
While wants are not considered necessary for continued existence, there is some evidence to suggest that psychological wants may be as necessary to life as physiological needs. For example, "wanting" to be with other people is often considered nice to have, but not essential to life. Studies of the neuro-physiology of the brain, however, suggest that companionship triggers the release of specific chemicals that when absent cause physiological problems. Fortunately, doctors of economics (who are not doctors of neuro-physiology) need not be overly concerned with the difference between psychological wants and physiological needs. A market does not care if wants are necessary or not. The only consideration is that people are motivated to do things (go to work, make a purchase, get an education) to satisfy them. If Duncan is willing and able to pay $3 for a Hot Mamma Fudge Bananarama Ice Cream Sundae, it matters not if he needs it or just wants it.
Recommended Citation:WANTS, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2023. [Accessed: March 24, 2023].
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Today, you are likely to spend a great deal of time touring the new suburban shopping complex trying to buy either a velvet painting of Elvis Presley or a wall poster commemorating yesterday. Be on the lookout for poorly written technical manuals.
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The first paper notes printed in the United States were in denominations of 1 cent, 5 cents, 25 cents, and 50 cents.
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"It's usually the last ounce of effort that tips the scales of success." -- Rick Beneteau
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