Unit 2

Demand of a commodity depends on the utility of that product to customer. If the customer
gets higher utility from a good he might be willing to pay a higher price to that product and vice
versa. All desires,tastes and motives of human being is called wants in economics. A want can
arise from elementary or from psychological causes.utility can also be said as the quality of
goods and services that satisfies our need.since the resources are limited ,one need to choose
between urgent need and not so urgent need. Utility ids the want satisfying power of a
commodity. Utility is not same as usefulness

All wants of human beings have certain characteristics like follows:

 Wants are complementary

 Every want is satiable
 Wants are competitive
 Wants may vary with time, place and person
 Some wants may recur again
 Wants are influenced by advertisement
 Wants becomes habits and customs
 Wants are unlimited
 Wants are alternative