Economic problem
...oods and services. Furthermore, purchasing will depend on their level of income. Individuals, who have low incomes, are affected by the economic problem more severely than those on higher income. People who have low incomes can satisfy fewer of their wants. They may not even be able to cover the cost of various basic wants such as foods, shelter and clothing. The government also faces the economic problem. Government wants are usually wants of the whole community. What is desired will depend on the preferences of the community as a whole, and not only those of the individual person. In Australia, the local government provides collective wants of a local nature, such as parks and sports facilities. The state governments provide wants for the wider community, such as hospitals and schools. The federal government, which is also known as the commonwealth government satisfies the wants of the entire nation, such as the defence force. Governments provide collective wants by using taxation revenue, collected from the community. In addition, entrepreneurs are people who manage or organise an enterprise, by taking risks to gain profits, or sometimes a loss. Entrepreneurs are known as theatrical promoters. They face the economic problem, due to them having to provide wants to consumers, with a limited supply of resources, and an unlimited range of wants. This forces the Entrepreneurs to take unnecessary risks, which may cause a profit or a loss. Consumers also face the economic problem. Consumers have to make a choice on their desired wants. What is desired will depend on personal preference, and realistically the price. Consumers also face the problem due to wanting constant supplies of goods, with limited resources. This means consumers must get basic wants first, and then choose what they desire next. Once consumers have satisfied one want, they will ultimately seek to satisfy another one. Due to their means of satisfying wants being limited, they can not satisfy them all at once. Therefore this problem will constantly trouble consumers. Furthermore, as the economic problem faces many groups in society, those groups must figure out ways to solve the problem. Many have different economic factors that influence how they will deal with the problem and this is shown below. Individuals are shaped by a variety of economic factors including their age, income, expectations, future plans and family circumstances. Personality factors will also influence economic decision-making. For example, some people are keen to embrace change and risk, while others will avoid risk and prefer security. Whatever their level of income, individuals must make a choice about how much of that income they save, and how much they will spend. This will be influenced by their income level, as well as a range of other factors such as whether their income is likely to rise or fall in future. This is mainly how individuals try to answer their economic problem. The government has many factors that influence their answer to the economic problem. Governments can have a significant influence over the economic choices of individuals and business. This may include making it less or more expensive to make some choices. For example, taxing items such as cigarettes, to discourage individuals from smoking. In more extreme situations, governments may seek to influence economic behaviour by...