Introduction 1 From need to demand Solutions 1 a

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1 Introduction 1 From need to demnd Solutions 1 Need Existence need Sfety need Socil need Esteem need Self-ctuliztion need Exmples Clothing, medicl cre, wrmth, sexulity Protection ginst threts, stility Belonging to groups (fmily, friends) Reputtion, prestige, respect Development of one's personlity Mslow's hierrchy of needs illustrtes the interconnection mong the vrious needs. Thus, in order for higher-level need, such s the need for luxury products, to rise, lower-level needs, such s existence nd sfety needs, must first e stisfied. In societies where these needs re not stisfied to certin extent, it follows tht there will e little or no demnd for luxury products. c 1 Friendscout24 is n Internet site designed to fcilitte connections etween life prtners. Consequently, it stisfies primrily socil needs, like the need for prtnership nd love. Such needs re clssified in the third level of Mslow's hierrchy of needs. 2 Ostensily, it dels with stisfying the existence need to "not freeze to deth." You could, however, uy cheper jcket tht would stisfy this need lmost or just s well. In fct, the purchse of the Nike jcket lso involves socil nd esteem needs. If you re honest with yourself, you will proly dmit tht it involves long with ny possile increse in qulity eing respected y your collegues. d Possile criticisms of Mslow's hierrchy of needs: The stisfction of needs cnnot e empiriclly detected. The hierrchy of the individul thresholds cnnot e confirmed. The consumption of certin products my cover severl needs t the sme time. The hierrchy is imed primrily t Western, industrilized vlues. In Asi nd Afric, the order nd the importnce of individul needs cn differ from the Mslow s. Business Studies Pge 1 of 6 IWP-HSG

2 2 Existence needs Elective needs Individul needs Collective needs. Florin would like PlySttion.. Sine loves movies more thn nything. She looks forwrd to the new multiplex cinem in their town. c. Politicins cll for second highwy tunnel through the Gotthrd. d. Ursi from Grz spends lmost every other weekend t her vction home. e. Luc ttended the second yer of primry school. f. In ddition to her schoolwork, Corin goes to privte Spnish tutor two hours week. g. Kevin trins four times week t the gym. h. A refugee fmily is supplied with essentil clothing t detention center. Business Studies Pge 2 of 6 IWP-HSG

3 3 The need is perceived s deficiency in this cse, lck of or need for entertinment. This deficiency cn e stisfied with visit to the cinem. The need to go to the cinem, when ligned with purchsing power, corresponds to the wnt. The wnt then opertionlized on the mrket through the selling of cinem ticket meets the demnd. The term disposle income is generlly understood s the mount of income tht remins ville for spending nd sving, fter direct txes nd socil security contriutions re deducted. Disposle income is thus key fctor in purchsing power. c Aprt from disposle income, other fctors ffect n individul s the purchsing power. Exmples re income level, ccumulted welth, currency differences (for exmple, when importing goods or shopping in neighoring countries), the solute price level (monopolistic mrkets vs. perfectly competitive mrkets) nd the price level over time (infltion cuses prices for products to rise, mening the consumer cn uy less with the sme mount of money). Business Studies Pge 3 of 6 IWP-HSG

4 4 Consumer good Cpitl good Service Right 1. A printer uys powerful new printing presses. 2. Fritz uys heting oil for his home. 3. Krl wnts to go on holidy to Mllorc. He goes to trvel gency for consulttion. 4. The Kuer fmily uys tle in furniture store for the living room. 5. A printing fcility uys lck ink for newspper production. 6. A nk mnges Ver s personl ssets. 7. Stefn uys new pencil for school. 8. Mr. Müller, n rchitect, uys new pencil for drwing his plns. c Services of doctors, civil servnts, techers, nks, resturnts, insurnce compnies, trvel gencies, lwyers Business Studies Pge 4 of 6 IWP-HSG

5 d 1. The possile rguments rise primrily from the delinetion of the ctul product of sfri: If the viewing of nimls lone is considered the product, it cn e rgued tht the core service is still free nd open. The economic, non-free good, however, is the guided tour, the vehicle, the ride, the knowledge nd experience of the tour guides to quickly nd ccurtely point out the est views. If the sfri s whole is considered the product, it could e rgued tht people hve long undertken their own journeys of discovery through the Africn wilderness. The sfri ws then, consequently, free good. Only with the incresed needs of society, such s the desire for comfort on such trip or the incresed need for security, hs the sfri een turned into n economic good. 2. There re lso severl spects of wter s product tht cn e rought up in the rgument for or ginst its development into n economic good: Delinetion of the product: In the cse of tp wter, customers re primrily chrged for the connection nd mintennce of the wter lines, not for the wter itself. Ntionl differences: In most Africn countries, wter is lrgely n economic good ecuse drought nd wter shortge re the norm. In most Western countries, however, sufficient wter supplies re still ville. Distinction mong types of wter: Treted wter is mostly n economic good, while lke, river nd rinwter re usully free, suject to certin restrictions, such s low levels in reservoirs or the use of pulic wter in times of drought. Business Studies Pge 5 of 6 IWP-HSG

6 5 c d e f g h Action A service enterprise wnts to fulfill ll customer orders ut lso sve on lor costs. Petr wnts to uy pir of tennis shoes, so she goes to different stores in serch of the est del. A truck driver wnts to trvel s fr s possile on one tnk of diesel. A pizz delivery service wnts to keep the driving distnce for ll ordered pizzs s short s possile. A trnsport compny would like to chieve mximum utiliztion of its ville vns. Tin wnts to get home from her vction in Ticino s quickly s possile. Rolnd uses his free time for studying in order to chieve the est possile grdes. Sophi tries to do s much lundry s possile with 100g of detergent. Solution / resoning Given result: fulfill ll customer orders Lowest possile use of resources: low wge expense Given result: uy pir of shoes Lowest possile use of resources: low price Mximum principle: Given lloction of resources: one tnk of diesel Gretest possile result: longest distnce Given result: deliver pizzs ordered Lowest possile use of resources: shortest driving distnce Mximum principle: Given lloction of resources: stock of vns Gretest possile result: mximum turnover Given result: Distnce to cover Lowest possile use of resources: shortest mount of time Mximum principle: Given lloction of resources: existing free time Gretest possile result: good GPA Mximum principle: Given lloction of resources: 100g of detergent Gretest possile result: mximum numer of wshes 6 A cell phone mnufcturer wnts to produce 50 phones per hour (given result) nd employ s few workers s possile (lowest possile use of resources). Mximum principle: The cell phone mnufcturer hs five workers ville for production (given lloction of resources) nd wnts them to mnufcture s mny moile phones s possile (gretest possile result). Business Studies Pge 6 of 6 IWP-HSG

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