Understanding Income, Economics, and Societal Needs
Functions of Income
- Consumption
- Savings
- Investment
Family, Business, and Status Expenditures
Family: Food, clothing, education, healthcare, employment, housing, entertainment, medicine, services, insurance, appliances, technology, furniture, transportation, etc.
Business: Personnel, machinery, services, technology, capital, security, healthcare, insurance, furniture, buildings.
Status: Personnel, facilities, buildings, technology, furniture, stationery, insurance, machinery, income.
What is Economics?
Economics is the science of managing scarce resources to produce goods or services vital for establishing individual and collective needs of society.
Economy Rankings
According to the field of research:
- Microeconomics: Studies the functioning of the economy of families and businesses.
- Macroeconomics: Studies the functioning of the economy as a whole at the country level.
According to theoretical analysis:
- Positive: Relates to the investigation of economic events and their consequences in an objective manner, free from any opinion.
- Normative: Refers to propositions about facts according to judgments of opinion about what should be done.
Depending on the nature of equilibrium or evolutionary analysis:
- Static: Balances topics studied variables.
- Dynamics: Study compared with history.
According to the evolutionary process of economics:
- Emerges from global developments related to studies and research on economic facts.
Understanding Societal Needs
Need is defined as the feeling of some discomfort for lack of something, the natural impulse to address certain shortcomings. We are referring here to the needs of food, clothing, and also social and economic progress, for example, the political organization of society and also having to do with recreation.
Rating of Needs
Depending on who emerges:
- Individual: Natural (housing, social) and social security.
- Society
Depending on their nature:
- Primary: Refers to the preservation of life.
- Secondary: Varies according to culture.
Depending on the nature of good employee:
- Property
- Service
Depending on the time of satisfaction:
- Present
- Future
According to its relation to other needs:
- Concurrent: They replace others (ceiling fan and air conditioning).
- Complementary: They cannot meet independently (need to buy a car and fuel).
- Recurring: Are repeated continuously (food, clothing, etc.).
Resources: Goods and Services
To meet the needs of society, resources (goods/services) are used. Goods and services = resources.
Real: A real call to all those tangible and intangible concepts that are available for people to meet their needs. We also include intangibles such as intelligence or creativity. We call free goods those that are limited and are not owned, and economic goods are scarce, useful, and transferable. For example, automobiles, buildings, houses.
Classification of Financial Assets
According to consumer needs:
- Durable
- Non-durable
Depending on the level of development:
- Raw material (animal, vegetable, and mineral).
- Semi-finished product (not ready for sale).
- Finished product (intermediate end component parts).
Depending on your role including:
- Complementary: Used together (auto-fuel).
- Substitutes: Compete with each other (air conditioning, fan).
- Independent: No relationship between them.
Services: Means service activities that tend to satisfy the needs of people but do not produce any good material.