WHAT IS ECONOMICS?
Economics is a social science that studies how products and services are produced, distributed, and consumed. It helps in studying how an individual, business, government, or a country should allocate their given resources for the efficient use of it and to maximize production. With the help of economics individuals, businesses, governments, and countries can do a lot better. Economic analysis progresses through analytical processes such as mathematical logic, in which the hypotheses of various human activities are imagined in a ‘means-ends structure. Here you will know about the activities of economics and its features.
WHAT ARE THE ACTIVITIES OF ECONOMICS?
All the activities that we do to earn money or for our living are economic activities. All other activities will be considered non-economics.
If we have to define “what is an economic activity?”. Then it would be right to say that, an activity includes production, manufacture, selling, and buying of goods by the people in order to satisfy their needs. Economic activity is a deal to produce, distribute, and utilize products and services.
Activities of economics surely involve monetary value or exchange of goods and services.
To classify three different types of economic activities, it will be classified as follows:
BUSINESS: This type of business activity involves producing goods and services according to the needs of humans. To satisfy their needs in order to earn profit.
PROFESSION: This includes performing specialized tasks for others or for other businesses. These activities are generally done in exchange for monetary values.
EMPLOYMENT: This activity is carried out within the terms of a contract between the employer and the employee. In this case, the employee works for the firm and is compensated with pay or a salary.
FEATURES OF ACTIVITIES OF ECONOMICS.
There are mainly four types of different features of activities of economics. We have discussed all four in detail in the most convincing way possible. The four types of features are income generation, productivity in nature, consumption is also economic activity and it is also saving, investment and wealth.
INCOME GENERATION: As we already discussed that all economic activities involve some sort of income. However, it does not necessarily need to be monetary value, it can be of many different forms. Considering this, if an individual is making a living or earning an income out of performing any activity, it will be called economic activity.
So, if you utilize any of the components of production, such as land, capital, labor, or an entrepreneur, and make an income in the form of wages, salary, rent, royalties, profit, or other forms of compensation, we will define your activity as an economic activity.
PRODUCTIVE IN NATURE: Economic activity is a means of livelihood, so as a result, it involves production. That is why we say, economic activity is productive in nature. It always includes the production of goods or services.
For instance, a manufacturing worker works to create products, a software developer works to create services, and a teacher gives services as well. Farming is also an economic activity because it contributes to the output.
So many times, individuals produce goods for their own consumption. But as there is production taking place, so it is still an economic activity. It is like so because the production will anyway affect the overall supply of the market. Activities such as transporting, warehousing, and many more which in anyhow bring supply to the market are considered productive economic activities.
CONSUMPTION IS ALSO AN ECONOMIC ACTIVITY:
The demand side of the market is represented by consumption. It is the whole and sole reason, for which production and supply of goods and services take place. The consumption of goods makes the market more competitive and helps it improve its quality. As a result, consuming promotes the creation, making it an economic activity in and of itself.
SAVING, INVESTMENT AND, WEALTH: Savings are amounts of money saved that are not spent. Savings are put into a number of mediums, including savings accounts, term deposits, the stock market, mutual funds, real estate, gold, and so on. These investments later turn into wealth. The private and public firms then borrow these funds to invest in their businesses and expand the country’s economic activity.
CONCLUSION
With the help of economics individuals, businesses, governments, and countries can do a lot better. Economic analysis progresses through analytical processes such as mathematical logic, in which the hypotheses of various human activities are imagined in a ‘means-ends structure. All the activities that we do to earn money or for our living are economic activities. All other activities will be considered non-economics. Economic activity is a deal to produce, distribute, and utilize products and services.
FREQUENTLY ASKED QUESTIONS (FAQs)
1. What is economics?
Ans. Economics is a social science that studies how products and services are produced, distributed, and consumed. It helps in studying how an individual, business, government, or a country should allocate their given resources for the efficient use of it and to maximize production.
2. What are the activities of economics?
Ans. All the activities that we do to earn money or for our living are economic activities. All other activities will be considered non-economics.
- An activity includes production, manufacture, selling, and buying of goods by the people in order to satisfy their needs.
- Economic activity is a deal to produce, distribute, and utilize products and services.
- Activities of economics surely involve monetary value or exchange of goods and services.
3. Explain economic activity as productivity in nature?
Ans. Economic activity is a means of livelihood, so as a result, it involves production. That is why we say, economic activity is productive in nature. It always includes the production of goods or services.
So many times, individuals produce goods for their own consumption. But as there is production taking place, so it is still an economic activity. It is like so because the production will anyway affect the overall supply of the market. Activities such as transporting, warehousing, and many more which in anyhow bring supply to the market are considered productive economic activities.