Economic activity is any human activity that is carried out in return for money or the value of money. Workers in a factory, for example, work to earn a living. Non-economic activities, on the other hand, are any acts that have no monetary motivation and are carried out with feelings of love, sympathy, or humanity.
Playing in the garden, dancing, a woman preparing dinner for the family, or a boy assisting an elderly man across a road, to name a few examples.
The main distinction between economic and non-economic activities is that economic activities are carried out to meet human requirements, whilst non-economic activities are carried out to satisfy psychological needs. So, read on to learn more about the contrasts between these two forms of human activities.
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What Are Economic Activities?
The creation, distribution, exchange, and consumption of products and services are all examples of economic activities. Humans engage in economic activities in order to earn a living and accumulate wealth.
A trader, an agriculturist, a manufacturer, a doctor, a teacher, and factory laborers are just a few examples of economic activity. People engage in these activities in order to earn a living and accumulate riches.
The production, distribution, exchange, and consumption of products and services are at the heart of economic activity. Economic activity returns can be stated in monetary terms. A businessperson makes a profit, doctor bills for his services, and a farmer raises veggies to sell at the market.
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Types of Economic Activities
Actually, economic activities include anything that includes money or the exchange of goods or services. The following are the three sorts of economic activities:
This economic activity involves providing goods and services to meet daily human requirements in order to make a profit.
A profession can also be defined as an occupation or a professional vocation that provides specialized services for a fee.
The activity is carried out under the terms of a contract between the employer and the employee. In this case, the employee works for the company and is compensated (wages or salary).
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Economic Activity Characteristics
The following are some of the most important aspects of economic activities:
The basic goal of economic activity is to make a profit and hence accumulate wealth. Individuals engage in these activities in order to earn a living through economic gain.
Economic activities necessitate the use of resources such as land, labor, and capital.
Profit maximization is achieved by wisely allocating scarce resources in economic operations. This includes maximizing the use of land, labor, capital, and any other production-related resources.
Only legitimate actions that are undertaken for monetary benefit can be classified as economic activities. Burglary, theft, smuggling, and other illegal acts, for example, cannot be included in the definition of economic activity.
Social norms must be followed in all economic activities. They can't be unpopular in society.
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What are Non-Economic Activities?
Non-economic activities are actions conducted solely for the sake of love, affection, sympathy, or patriotism. These activities are carried out voluntarily with the goal of providing free services to others, hence they cannot be quantified in terms of money.
It encompasses any acts that are carried out to satisfy human emotions, whether they are social, religious, cultural, personal, recreational, charitable, or patriotic.
Examples of non-economic activities are:
Activities to do in your spare time
Its sole purpose is to provide enjoyment during idle time. Painting and signing, for example.
Activities with a Family Commitment
This activity is committed to and inspired by family. For example, a teacher may educate her or his own child at home, and a doctor may consult his family, among other things.
Cultural and Religious Activities
This activity is both enjoyable and beneficial to one's mental health. Worshiping God and attending the temple, for example.
Social Welfare Activities
They are motivated by a strong desire to help or sympathize with others. Donations to the less fortunate, participation in a relief camp to assist individuals impacted by war or natural disasters, and so forth.
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Characteristics of Non-Economic Activities
Non-economic activities are defined by the following characteristics:
Non-economic activities are conducted only for the purpose of self-satisfaction.
Even if they do not yield any monetary return, non-economic activities can be conducted as an obligation or compulsion to satisfy societal norms.
No Financial Reward
The most significant feature of any such activity is that it provides no financial benefit to the individual who engages in it. As a result, these activities cannot be regarded as economically vital. These are either just for fun or are socially binding.
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Economic and Non-Economic Activities: What Are the Differences?
The distinction between economic and non-economic activities can be clearly identified on the basis of the following:
Economic activities are activities that involve the production and consumption of products and services for monetary benefit. Non-economic activity is defined as an activity carried out happily with the goal of giving services without regard for monetary gain.
Economic operations are carried out with a profit objective in mind. Non-economic actions, on the other hand, are carried out for social or psychological motives, such as love or affection.
Economic activities are measured in monetary terms, but non-economic activities are not measured in monetary terms.
Economic activities are pragmatic in nature; in other words, they deal with problems in a practical manner. Non-economic activities, on the other hand, take an idealistic approach, placing a higher priority on human values than on money.
Because economic activities are carried out for profit, they result in the creation and accumulation of wealth. Non-economic pursuits, on the other hand, produce mental gratification and enjoyment.
Economic activities are vital to the economy because they increase the value of the country's gross domestic product (GDP). Non-economic activities, on the other hand, have no bearing on a country's national income.
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Following the foregoing discussion, it can be concluded that the sole feature that distinguishes economic and non-economic activities is their goal. The same action might be both profitable and unprofitable at the same time.
For instance, If a father drops his child off at school in his car, this is a non-economic activity because he does so out of love and care, but if there are five other children in the car who pay money for transportation to him, this is an economic activity because the person is getting paid for the service he is providing.