The social result of economic activity is the satisfaction of human wants. In any period of time, say a year, an immense variety of goods (cars, clothes, books and beer) and services (such as those of doctors, dentists, politicians and pop singers) becomes available in varying quantities. These goods and services satisfy the wants of those who purchase them. Obviously not all wants are satisfied by this economic activity, for wants are virtually insatiable and resources are scarce. But if we think of the ‘economic system’ of a country in this way we can, subject to some obvious safeguards, regard it as a ‘machine’ for organising the production of goods and services which ultimately satisfy human wants.
KeywordsEconomic System Price Level Machine Analogy Service Composition Individual Decision
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