Needs, Wants and the Three Economic Groups
Economics starts with a problem: endless wants, limited resources. Meet needs and wants, the three big questions every economy must answer, and the three groups who take part: consumers, producers and government.
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The economic problem
Economics is about a simple problem: people have endless wants, but the world has limited resources. So every society must make choices. Every economy answers three big questions: what to produce, how to produce it, and who benefits. This module looks at needs and wants, and at the three groups who take part.
Needs and wants words
Four ideas run through this module:
Needs or wants
The line between a need and a want can shift over time and between people.
Match each term
- Need
- Want
- Good
- Service
- Something you must have to survive
- Something you would like but could live without
- A physical product you can touch
- An action done for a customer
Need or want?
Fifty years ago a smartphone did not exist. Today many people feel they cannot manage without one. What does this show?
- That what counts as a need or a want can change over time
- That a smartphone is now a basic need for survival
- That a smartphone is not a good
- That needs and wants never change
Who takes part?
Three groups take part in the economy. Consumers buy and use goods and services. Producers make goods or provide services. The government provides public services like schools and roads, collects taxes, and makes the rules. They all interact: consumers buy from producers, producers pay workers, and the government taxes both.
One coat, three groups
- Consumers
- Producers
- The government
- Buys the coat from the shop and wears it
- Turns rolls of cloth into coats to sell
- Takes tax from the sale and sets safety rules
The big questions
Every economy must answer three key questions. Select the TWO that are among them.
- What to produce
- Who benefits from what is produced
- What the weather will be tomorrow
- What colour to paint every house
Round the economy
Put this simple flow of economic activity into a sensible order.
- A producer makes a good, such as bread
- The producer sells it in a shop
- A consumer buys and uses the bread
- The government collects tax on the sale
- The government uses taxes to provide schools and roads
Foundations in words
Something you must have to survive is a _____, while something you would like but could live without is a _____. The three groups in the economy are consumers, _____ and the government. Every economy must decide what to produce, _____ to produce it, and who benefits. A physical product is a _____, while a haircut is a service.
Needs, wants and who makes them
Tap the TWO statements that are TRUE.
- A need is something you must have to survive.
- Producers make goods or provide services.
- A want is essential for survival.
- The government is the only consumer in the economy.
- Needs and wants never change over time.
Who is who?
Decide about each economic example. Choose each time.
- A bakery makes and sells bread. Which economic group is the bakery?
- A family buys the bread to eat at home. Which economic group are they?
- Clean drinking water is best described as which of these?
Explain the foundations
Explain the difference between a need and a want, and explain the role of each of the three economic groups.
- Explain the difference between a need and a want
- Give an example of a need and a want
- Name the three main economic groups
- Explain what each group does