Nabila Alya Zahra

1506673076

Reaction Paper
From the article that has been written by Ernest Raiklin and Blent Uyar, which the title is : On
the relativity of the concepts of needs, wants, scarcity and opportunity cost, I interest with the
way they started their article with this word The concept of scarcity is the cornerstone of
economics as a discipline because at the first place, it makes me wonder how could it be the
base of economics as a discipline? But then I remember the things that Ive learned mentioned
that scarcity means that society has limited resources and therefore cant produce all the goods
and services people wish to have. Meanwhile, The word economy comes from a Greek word for
one who manages a household. So when I combine those two words, I can conclude that
economics is the study of how society manages its scarce resources. But which scarcity that
defined economics as a discipline? As I continue my reading, I found that the articles states it is
relative scarcity which defines economics.
I appreciate the fact that they separating different subject on each subtitles such as wants, needs,
scarcity, opportunity costs, inside their article because with this way I think that readers could be
more focus on a topic, based on its subtitles. Overall, this article seems accountable since I found
the authors quoting several statements with reliable sources. For example, they quote several
statements from two American economists, Samuelson and Nordhaus.
Now, lets move on to the content, There are two main reasons why economists have chosen to
overlook the differences between needs and wants. The first reason is that doing so has not at all
hampered the economics profession in developing a descriptive paradigm of todays developed
capitalist economies. The second reason is that not dwelling on the concepts of needs and wants
has enabled economists to keep interpersonal comparisons out of utility theory. I personally
agree with this statement because if there is something that doesnt affect you on anything, why
should you concentrate on those things, otherwise it will be a distraction for us to aim our main
goal.
Next, the article mentioned the definition of needs and wants. Needs have two components such
as biological and social-culture, which they both are related to each other, for example, when
someone sick, he/she needs a medicine to get better, but someone that lives in higher level of
society tends to use non-generic medicine which is more expensive than the generic medicine,
the choice that he/she made is based on not only biological but also social-culture. Like the
article said that At any given time, what is considered to be a necessity in one country might
well be regarded a luxury (above what is required by the necessity) in another country or in
this case, different levels of society. Wants, are needs plus some residual that only some people
can afford. For example, when someone needs a car as transportation from home to campus it is
ok to have the oldest and cheapest car as long as it is works as a transportation, but as people
have wants, when they afford, they tend to choose Lamborghini instead of Toyota Avanza.
Dont forget also about scarcity and opportunity costs that relate to someones needs and wants.
After reading the article, I realizing the relativity of needs, wants, scarcity, and opportunity costs,
that they have different meanings on every different conditions and situations.