What is Scale of Preference?
Scale of preference refers to a list of individual wants in order of their relative importance. The drawing of scale of, preference will make it easier for choice to be made.
Since human wants are unlimited and the available resources used in satisfying these wants are limited and cannot satisfy all human wants; human beings have no choice than to rank these needs in order of their relative importance, called scale of preference, placing more important or pressing needs first before the less important ones that may be satisfied at a latter day.
This hierarchicalization of needs which is inevitable as a result of limited resources helps one to make rational choices. For example, a student who is in dire need of textbooks, sneakers, pen, shoes, jean, shirts, book, etc., but with limited resources, may draw his scale of preference like this:
Examples of Scale of Preference
Using a High School Student’s need as example:
|Items Needed||Price ($)|
Suppose the student has $20 at hand at the time he needed the above items; judging from his scale of preference above, he can afford to purchase only book, biro, pen and sneakers as a result of his limited available resources of $20 relative to his needs.
This student will therefore face the problem of choice and opportunity cost.
When a student follows or makes use of the above table i.e. according to how important they are, the student is said to behave rationally.
Reasons for Scale of Preference
Why scale of preference is necessary:
- Scale of preference helps us to rank our needs in order of their relative importance.
- lt helps or aids an individual to make rational choices.
- It leads to efficient utilization of limited available resources.
- The drawing of scale of preference shows our needs at a glance and reminds us of such needs and compels us to plan for the satisfaction of such needs.
- Since human wants are numerous and the resources to satisfy them are scarce, scale of preference is therefore necessary to aid us to make choices that give maximum satisfaction.
- The scale of preference aids an individual to forgo those wants he cannot satisfy as a result of his limited available resources.