Chapter 2 Class 6 Economics - Needs and Wants

How does economics help people understand how to allocate their resources efficiently and effectively between their needs and wants?



Answer by Student

  • Economics is the study of how people use their things to get what they need and want . Things are the stuff that people can use to make or do other things, such as land, workers, machines, and ideas. Needs and wants are the things that people must have or like to have , such as food, water, house, school, fun, etc.

  • Economics helps people understand how to use their things wisely and well between their needs and wants by teaching them about scarcity , choice , opportunity cost , and markets .

  • Scarcity is when there are not enough things for all the needs and wants of people. Scarcity makes people choose how to use their things.

  • Choice is when people pick one thing from among many things. Choice means comparing the good and bad of different things and picking the best one.

  • Opportunity cost is what people give up when they make a choice. Opportunity cost shows what people lose or miss out when they make a choice.

  • Markets are places where people buy and sell things for money or other things. Markets use prices to show how much people value different things. People will pay more money for things that they want more. People will use more things to make or do things that have more money.
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Davneet Singh has done his B.Tech from Indian Institute of Technology, Kanpur. He has been teaching from the past 14 years. He provides courses for Maths, Science, Social Science, Physics, Chemistry, Computer Science at Teachoo.