Economic activities create economic or financial gain by producing goods or services. Economic consideration is paramount in these activities because human beings want to satisfy their biological needs like food, shelter etc. Economic activities are undertaken with an economic motive. Non-economic activities, on the other hand, do not have economic motive and are undertaken on account of love, affection, social, cultural or religious reasons.
Characteristics of Economic Activities:
The following are the characteristics of economic activities:
1. Wealth Producing Activities:
The economic activities are undertaken to produce wealth. The wealth is produced by productive activities. The production may be for the consumption of family members or for the others. A farmer may grow vegetables for his family consumption and for selling in the market. The produce sold in the market will fetch income for the farmer.
2. Satisfying Human Wants:
The main aim of economic activities is to satisfy human needs. The needs to be satisfied may be present or future. When a person undertakes a job to earn money and buy necessities for his family then it will be satisfying present needs. On the other hand when a person saves money out of his current earnings for satisfying his needs after the retirement then it will be a plan for the future.
3. Money Income:
All economic activities, these may be related to business, profession or service, help in earning money income. People undertake these activities to satisfy their family needs with the help of money earned through productive activities. A living is possible with money income earned from economic activities.
4. Developmental Activities:
Economic activities not only satisfy human wants but also become a basis for economic development of the society. When old needs are satisfied then new needs crop up. The economic resources are employed to produce new products and this process helps in generating employment avenues and ultimately the money income. The social development is linked to the economic activities undertaken there.
Objectives of Economic Activities:
Economic activities are undertaken to produce goods and services so that human wants are satisfied. The human efforts are directed for the welfare of society. All kinds of occupations and professions are undertaken to create wealth and satisfy human needs. Fisher gives two objectives for economic activities, i.e., proper allocation of resources and optimum use of resources.
These objectives are discussed as follows:
1. Proper Allocation of Resources:
The economic resources are limited and their requirements are many. It is essential to make a judicious allocation of resources so that maximum needs are satisfied. Every person assesses his needs and resources. He determines his priorities for applying his resources. Some needs are urgent while others may wait for some time. An effort is made to get maximum satisfaction out of the use of available resources. Proper allocation of resources will ensure their best use.
2. Optimum Use of Resources:
The other objective of economic activities is the optimum use of resources. The resources should be put to their maximum use. Various factors of production like land, labour capital, etc. should be used in producing goods in such a way that no part is kept idle. For example, if a set of factors of production can produce a specified number of units then the production should not be less than that quantity otherwise the resources will not be fully used.
The optimum is the level of greatest satisfaction and nothing can go beyond it. When the resources are used to their optimum level then one will derive maximum utility out of them. The resources of the whole economy should be put to various uses in such a way that maximum economic welfare of society is possible. The use of various economic resources is dependent on each other. The use of capital will involve the use of land and labour also.
There should be a co-ordination in their use. The social welfare is possible only when factors of production do not remain idle. If a worker sits at home without finding any work then his labour goes waste, if capital is lying unused with the investor then its utility has gone waste. So the object of economic activities is the optimum use of resources.
Non-economic activities are those activities which are pursued because of social, religious, cultural, psychological or sentimental reasons. These activities have no economic motive but are undertaken to have self satisfaction.
These activities are voluntary in nature and are undertaken at the leisure or pleasure of the person pursuing them. The examples of such activities may be: a housewife working at home, a person engaged in social work, attending a religious activity, listening to a discourse by a saint, attending to accident victims by volunteers etc. All these activities are done for one’s own satisfaction.