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Types of Needs in Economics

Edukasistan.com - Hello everyone! Understanding the various categories of needs in the economy is crucial to making wise choices. In the economic sphere, the need is interpreted as something an individual or group needs to sustain life. The economy has a wide range of needs, including primary, secondary, and tertiary.

Primary needs, such as food, clothing, and shelter, are fundamental and must be prioritized. Secondary needs are less urgent, like recreational activities. Meanwhile, tertiary needs like jewellery or luxury vehicles are more luxurious and optional.

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    We can take more innovative and efficient economic steps by understanding the differences between these needs. For example, with limited incomes, we should prioritize primary needs before buying luxury goods.

    Besides, understanding these different needs also helps in more efficient budget management and avoiding waste. Therefore, we need to understand the different types of needs in the economy to make intelligent and sensible decisions in regulating our finances. Thus, we can achieve financial goals more quickly and efficiently.

    In this article, I will detail the different types of needs in the economy and the differences between one and the other. With a solid understanding of these needs, we can take more innovative and more efficient economic steps.

    • Needs are human desires that must be fulfilled to sustain life and well-being.
    • Human needs can be classified according to intensity, duration, characteristics, and subjects.
    • According to intensities, human needs are divided into primary and secondary.
    • According to time, needs are split into short-term and long-term.
    • According to nature, need is divided into physical and non-physical.

    What is Need?

    Types of Needs in Economics
    Types of Needs in Economics

    In the economic sphere, the need must be understood as it is everything an individual or a group needs to live a decent life. All these needs must be met to live a decent life and fulfil human rights. However, it is essential to distinguish between need and desire.

    Desires are extra things or luxuries not essential to survival but are desired by individuals or groups. Examples of desires are luxury vehicles, jewellery, or luxury holidays. These desires must not be fulfilled and are not a priority in individual or group spending.

    Understanding the difference between needs and desires is crucial in economics because it will affect spending and investment decisions. Needs must be met first before desires are met. By understanding these differences, individuals or groups can manage their spending more wisely and efficiently.

    Types of Needs in Economics

    Human needs can be categorized by intensity, time, nature, and subject, including primary and secondary, short-term and long-term, and physical and non-physical needs. This understanding enables individuals and societies to plan and meet needs more structured and efficiently.

    1. The human needs according to their intensity

    Human needs can be grouped according to their importance to individuals or communities. Needs that are considered critical include fundamental aspects such as food, housing, drinking water, and clothing that are essential for physical survival.

    On the contrary, less important needs exist, such as pleasures, luxury goods, and sightseeing. Although not crucial to survival, this need remains appreciated by individuals or societies.

    2. Human needs are time-based

    Human needs can also be classified according to the time of their needs. There are urgent needs that need to be met immediately, such as emergency medical care or the purchase of raw materials for today.

    On the other hand, there are long-term needs, such as saving for retirement or investing in property that will yield profits in the future. Understand for the time to come. Understanding the difference between short-term and long-term needs is vital in planning personal or business finances.

    3. Human Needs Based on Their Nature

    Next, human needs can also be grouped according to their nature, that is, physical and psychological. Physical needs include basic things like food, water, shelter, and clothing that are essential to physical health and body function.

    On the other hand, psychological needs include compassion, a sense of possession in a social environment, and recognition from others that is essential to one's mental and emotional well-being.

    4. Human Needs Based on the Subject

    Ultimately, human needs can be categorized according to the subject who needs them. Individual needs are related to personal health and hygiene, such as dental care, bathing, and eating healthy foods.

    On the other hand, there are social or community needs such as road infrastructure, general education, and public health services. Understanding the difference between individual and social needs is crucial in planning the economic development of a country.


    The difference between needs and desires is the key in economics. Needs are essential to survival, like food and housing, while desires are the addition or luxury of desire. Understanding these differences is essential for effective financial management and wise decision-making.

    This article has reviewed various types of needs in an economic context. We have seen how needs can be classified according to the level of urgency, the period, the characteristics, and the parties who need them.

    Understanding the differences between these types of needs is crucial for clever and effective economic decision-making. With a deep understanding of what is fundamentally needed by individuals or communities to live a decent life, we can be more effective in allocating resources and achieving economic goals.

    The article also emphasizes prioritizing basic needs such as food, clothing, and housing before switching to higher needs like education or entertainment. In addition, it discusses collective needs that must be met by society as a whole, including public infrastructure and services.

    Faced with resource constraints, we need to allocate resources wisely and efficiently to meet the most critical needs and maximize the benefits. Thus, understanding the different types of needs in the economy can help us make more informed decisions and achieve economic goals more effectively.

    Frequently Asked Questions (FAQs)

    1. What is the need in economics?

    Needs in the economic context refer to human needs or desires for goods or services that meet their physical and mental aspects.

    2. What is the difference between need and desire?

    Needs refer to basic needs for survival, such as food, clothing, and shelter. On the other hand, desires are more specific and variable needs between individuals.

    3. What is a primary need?

    Primary needs are essential requirements for survival, including food, clothing, and shelter.

    4. What is a secondary need?

    Secondary needs are non-essential to survive but improve the quality of life, such as entertainment and luxury goods.

    5. What are collective needs?

    Collective needs are the needs of groups or societies, such as public infrastructure, education, and health services.

    6. What is an individual need?

    Individual needs are specific needs of each person, including food, clothing, and shelter.

    7. What is a compelling need?

    A compelling need is a need that can be met with available resources, such as money, time, and energy.

    8. What is an absolute need?

    The absolute need is a need to be satisfied without exception, like the need for food and water.

    9. What is a relative need?

    A relative need is one whose fulfilment can vary, depending on the individual's choices, such as the type of food or clothing.

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