Definition of Economic Motives, Principles and Characteristics, and Types Completely

Every reason, encouragement, and action taken by a person or entity to carry out an economic action is referred to as an economic motive.

"Motive" comes from the word "motivate", which means "reason" or "motivator". Prosperity is the ultimate goal of economic motives. Let's look at the meaning of economic motives, the following types of economic motives and their goals!

Understanding Economic Motives

An economic motivation is used to encourage someone to take economic action to achieve prosperity.

However, economic activity is an activity carried out either individually or in groups to obtain goods or services to meet their needs.

In simple terms, it can be said that economic motives are the reasons behind various economic actions.

However, economic action is all one's efforts to meet their needs by considering the right priority scale to achieve prosperity. Economic motivation can come from within or from outside:

• Extrinsic motives usually come from supporting needs. Environmental influences usually cause this motivation to emerge. One of the main needs, for example, is a house or boards. However, it is possible that someone decides to buy a house according to certain standards and prices with the aim of gaining recognition or increasing social status in their environment.

• Intrinsic motivation is motivation that comes from within a person without encouragement or influence from outside sources. Intrinsic motives usually include basic human needs, such as buying food and drinks when hungry.

Principles and Characteristics of Economic Motives

Economic motives stem from disagreements between limited resources followed by human wants and tastes. When there is disagreement based on production, consumption and distribution activities, then economic principles emerge.

One characteristic of economic motives is as follows:

1. dwelling 

One of the truly commonplace and natural traits is rationality. Rationality also helps in determining what problems a person will be fully satisfied with.

We know that when we have a want or need, something that is important and beneficial in the long term takes precedence.

Readers may think about rational thinking before meeting their needs, and want to buy goods and services based on their benefits and price. However, many readers also consider the issue of contentment and security.

For example, person A chooses to buy bag Z over X, even though bag Z is not a foreign brand and is comfortable to use. 

2. Economical

Every human being has a habit of acting economically, whether he realizes it or not. Comparing income and expenses, for example, Not only that, but also considering profit and loss and price differences.  

For most people, the decision to buy goods or services can be influenced by a difference of only IDR 500. This is especially true when the price of these items drops to IDR 15.000.

3. Priority Scale

Priority scale is the third feature of the principle of economic motives. We all know that humans are creatures of many desires, and if we do it right, our desires are virtually limitless.

No matter how rich they are, they always feel inadequate. There are many expensive things and wishes that still want to buy. This shows that humans have a very big desire. 

Therefore, building a wise character is very important. Setting priorities is one way. Therefore, we can buy according to the needs that are really needed and provide maximum benefits and satisfaction.

The three principles that characterize economic motives above show that humans, as social beings, have a high efficiency principle.

Someone enters into non-economic motives if they meet their needs only to get praise, prestige, or an event to show their wealth.

Types of Economic Motives and Their Purpose

The following is an explanation of the types of economic motives.

Individual Motives

Individuals who are included in the first category of economic motives have internal motivation that encourages them to carry out economic activities with the aim of improving their quality of life and increasing their economic level.

Following is a further explanation of this type of economic motive.

• Motives to Meet Needs and Improve Living Standards

For the first group of people, the economic motive is to meet their needs, maintain their survival, and gain prosperity.

Here, prosperity can be defined as when a person has the ability to fulfill most of his life.

When a person works hard to earn money to meet his needs, this is an example of an economic motive.

If his income is insufficient, he will try to earn more money by doing other businesses. In general, human needs are divided into three, viz

• Primary, or the main needs that arise as an effort to survive. Clothing (clothing), food (food), and boards (houses) are examples.

• Secondary, namely the needs that arise after the fulfillment of various primary interests. Internet, transportation, mobile phones, and others are examples.

• Tertiary needs, which aim to improve social status. Examples include jewelry, clothing, and luxury brand cars, and so on.

• Economic Motives to Obtain Further Profits

The economic motive is to make a profit. One form of encouragement to increase survival is the desire for material gain.

A clothing seller using good quality, reasonable prices, and friendly service as a way to make money is an example of an economic motive in this category.

• Motives for Obtaining Awards

The appreciation of others is the next motivation for someone. However, this award is not only praise, but also an increase in social status in the surrounding community.

A business actor who, even though his business is already successful, continues to run his business with great enthusiasm and dedication is an example of this type of economic motive.

He does this in the hope of getting appreciation from the people around him because he is a loyal and hardworking businessman.

Organizational Motives

Organizations or companies are the next variety of economic motives. This drive stems from a collective desire to improve the financial situation of each member.

The following is a further explanation of several categories of economic motives.

• Goods Production Motives

In the first category, economic motives are the company's efforts to produce goods or services of the highest quality and affordable prices with the aim of maintaining a certain market interest.

The goal of this production process is to increase producer revenue, create new jobs, and maintain customer relationships.

• Motive to Gain Profit

Furthermore, the goal of economics is to make a profit, which enables companies to operate sustainably. To increase the value of profits, the following things can be done:

• Network development

• The price of goods is right

• Proper marketing

• Lower costs

• Expand product

• Motive to Maintain Consistency

Finally, maintaining existence is the most valuable economic motive. Therefore, the whole company is trying to continue to generate income. The goal is for the business to continue operating.

It discusses the definition of economic motives, their goals, and their types. In most cases, a person consumes to meet needs and produces to make a profit. Hopefully this information is useful, let's check out other articles on DailySocial.id!