Generally, the terms want and desire are used to mean the same thing. But in economics want refers to the desire which is backed by the ability and willingness to satisfy it.

A simple desire for anything does not become a want unless the person has the capacity to satisfy it and is willing to apply that capacity for satisfying the desire.

Therefore, human wants may be defined as effective desires for particular things which express themselves in the efforts or sacrifices neces­sary to obtain them.

There are four essential elements of human wants.

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i. Scarcity of things

ii. Desire to get the scarce things

iii. Sufficient amount of money to satisfy the desire.

iv. Willingness to spend the money to get the desired things.

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Human wants are unlimited, varied and diverse. They encourage people to undertake economic activity. Satisfactions of wants through production and exchange of goods and services is the basic aim of economic activity.

Wants may be classified into two broad categories.

1. Primary or basic wants e.g., food, clothing and shelter which are common to all persons; and

2. Secondary or non-basic wants e.g., education, travelling, etc., which differ from person to person.

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A person first of all tries to satisfy his primary wants at all costs. Secondary wants are satisfied as and when the necessary resources become available.