Needs are things essential for survival, like food, water and shelter. Wants are things we'd like to have but don't strictly need, like a new phone. Scarcity is the basic economic problem that resources are limited while wants are essentially unlimited, which forces individuals and societies to make choices about how to use what they have.
Example
A family with a fixed weekly budget has to choose between saving for a holiday (a want) and paying for groceries and rent (needs) — because money is scarce, they can't have unlimited amounts of both.
Key terms
Need:
Something essential for survival.
Want:
Something you'd like but don't need to survive.
Scarcity:
Resources being limited compared to unlimited wants.
Opportunity cost:
What you give up when you choose one option over another.
Questions
1. Which is a need?
Food
A new phone
A holiday
A video game
2. Which is a want?
Water
Shelter
A new phone
Food
3. Needs are things you:
Must have to survive
Would just like to have
Never need
Can always afford
4. Wants are things you:
Must have to survive
Would like but don't need
Never want
Always get for free
5. Scarcity means resources are:
Unlimited
Limited
Always free
Never used
6. If you have limited pocket money, you have to make:
No decisions at all
Choices about what to spend it on
Unlimited purchases
Nothing, money is unlimited
7. Shelter, food and water are all examples of:
Wants
Needs
Luxuries
Toys
8. Which is an example of a need?
A new phone
Shelter
A holiday
A video game
9. Scarcity means:
Resources are unlimited
Resources are limited compared to wants
Everyone gets everything
Prices never change
10. An "opportunity cost" is:
The price tag on an item
What you give up when you choose one option over another
A type of tax
A government payment
11. A want, unlike a need, is:
Essential for survival
Not essential for survival
Always free
Illegal
12. If you spend your allowance on lollies instead of saving it, the opportunity cost is:
The lollies themselves
What you could have bought or saved instead
Nothing, there's no cost
The shop you bought from
13. A family with limited money must decide between needs and wants. This is an example of:
Unlimited resources
Scarcity forcing a choice
No scarcity at all
A want being more important than a need
14. Which of these is an example of a want, not a need?
Drinking water
A roof over your head
A new gaming console
Warm clothing in winter
15. A government has a limited budget and must choose between a new hospital or a new stadium. This decision is an example of:
Unlimited resources
Scarcity and opportunity cost
No choice being necessary
A want, not a need
16. Why do individuals and societies have to make choices about resources?
Because resources are unlimited
Because resources are scarce compared to unlimited wants
Because choices are illegal
Because everyone gets everything they want
17. If you buy a new phone (a want) instead of saving for future needs, the opportunity cost is:
The money spent
What you gave up by not saving it
Nothing at all
The phone company's profit
18. A family buys groceries (a need) instead of going on holiday (a want) because money is tight. This shows they are responding to:
Unlimited money
Scarcity
No opportunity cost
A government law
19. Which best explains why 'wants' can sometimes feel just as urgent as 'needs'?
Because wants are always more expensive
Because advertising and social pressure can make wants feel essential
Because wants are needed for survival
Because there's no real difference
20. A city can afford either a new library or road upgrades, not both. This is a real-world example of:
Unlimited resources
Scarcity and opportunity cost
A need being ignored
Free choices with no trade-offs
21. Opportunity cost is best described as:
The price on a receipt
What you give up when choosing one option over another
A type of tax
Money you'll never get back
Answer key (parent copy)
1. Food
2. A new phone
3. Must have to survive
4. Would like but don't need
5. Limited
6. Choices about what to spend it on
7. Needs
8. Shelter
9. Resources are limited compared to wants
10. What you give up when you choose one option over another
11. Not essential for survival
12. What you could have bought or saved instead
13. Scarcity forcing a choice
14. A new gaming console
15. Scarcity and opportunity cost
16. Because resources are scarce compared to unlimited wants
17. What you gave up by not saving it
18. Scarcity
19. Because advertising and social pressure can make wants feel essential
20. Scarcity and opportunity cost
21. What you give up when choosing one option over another