Scarcity and Opportunity Cost: Question 6
Syllabus 1.1
Katya has just saved up and bought a new bicycle, the one thing she wanted more than anything else. Within a week of owning it, she decides she now wants a bicycle helmet to go with it, and soon after that she wants a bike lock as well, to keep it secure.
Which statement best explains why economists describe human wants as unlimited, based on Katya's experience?
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Worked solution
Step 1: Recall what “unlimited wants” means in economics
Economists describe human wants as unlimited not because any one person wants an infinite quantity of a single good, but because satisfying one want tends to reveal or create further wants, so wants as a whole are never completely and permanently satisfied.
Step 2: Apply this to Katya’s experience
Katya’s want for a bicycle was genuinely satisfied, she saved up and bought one. But almost immediately, owning the bicycle created a new want (a helmet), and satisfying that created another (a lock). This sequence, one want met, a new one appearing, is exactly the pattern economists mean when they call wants “unlimited”: the total list of things Katya would like never actually reaches zero.
Step 3: Rule out the other options
- Option A wrongly claims the bicycle want was never satisfied. It was; the point is that new wants replaced it.
- Option C confuses unlimited wants (a feature of what people would like to have) with limited resources (a feature of what Katya can afford). These are the two separate sides of the basic economic problem, not the same idea.
- Option D misclassifies ordinary further purchases as “needs”. A need is a limited good essential for survival; a helmet and a lock are additional wants, not needs, even if Katya feels she requires them for cycling safely.
Final answer
Katya’s experience shows that satisfying one want creates further wants, so wants overall are never fully satisfied. This is option B.