5 Marks Each

Question

Clarify the meaning of Economic Activity and Non-Economic Activity

Vidyadip · Accepted Answer

* Introduction: * Economics, Social, Religious or Political activities carried out by human during his life. * In all these, economic activity is centered. * Because to survive life, income is necessary. * Economics studies economic activity of human only. * In this regard it is necessary to distinguish between economic activity and non-economic activity. * Economic Activity : * Activity performed with the purpose of getting economic benefits in the form of incomes, involving exchange of goods, service and / or factors as well as involving costs use this income to satisfy his wants. * Income and expenditure are two sides of a coin. * “Human, to satisfy his human wants, for the exchange of goods and service, activity of earning income or spending is known as economic activity.” * Income, expenditure and transactions are three major elements in economic activity. * According to prof. J. R. Hicks, “The activities, which involve income earring or spending through exchange of goods and service is economic activity. * With the expectation of reward or something and comparison with advantages and disadvantages whatever activity is carried out by human is economic activity. * Economic activity unavoidably associated with exchange of goods and services. * To satisfy one’s want he earns income and he spends through exchange then it becomes economic activity. * For example : * A farmer do farming and produced food grains and after selling it he earns income, he spends this income on housing, clothes, motorcycle to satisfy his needs. * Similarly, spending on food items in restaurants, we satisfies our hungers, spending on movies at theater we satisfies entertainment needs, a teacher who teaches children at school and earns income is also economic activity. * The activity which aims to satisfy human wants and to gain something, aiming to earn income from activity and spending on something which includes exchange, known as economic activity. * In short, the transaction of goods and services which leads to earning of income or spending of income is known as economic activity. * Economic activity may be of illegal or legal, moral or dismoral, welfare oriented or harmful. * There is a possibility that economic activity may be productive or may not be productive. * E.g. Efforts made by farmers to grow food grains but because of drought or famine it will lead to failure of crop, even though it is an economic activity. * Non-Economic Activity : * Activity which is performed without the specific purpose of obtaining economic gains is called non-economic activity. * The activities which does not aim to earn income or spends income and there is no exchange carried out by such activities, but just because of mercy, attraction, love, revenge etc. * Any activity takes place is known as Non-Economic activity. * E.g. Donate money. Similarly for self use any goods or service being produces are non-economic activity. * For Example : * If a teacher teaches his child is non economic activity. * But if he teaches to some other children then it is economic activity because he earns income from that. * Similarly, activities of thieves or robbers avoids exchange activity thus it is also non-economic activity. * In short, without objectives of earning income or spending income, exchange motive, whatever activities are carried out is known as non-economic activity.

Answer

Need a full question paper?

Explore more

Similar questions

Economics : An Introduction — Economics STD 11 Commerce — Question

Answer

Need a full question paper?

Explore more

Similar questions