Question

What is economic activity ?

Hint:

The simplest way to identify an economic activity is to ask: "Is someone getting paid for this?" or "Is a good or service being produced to satisfy a want?". If yes, it's an economic activity. Activities done out of love or for personal satisfaction (e.g., a hobby) are non-economic activities.

Answer 1

An economic activity is any action that involves the production, distribution, exchange, or consumption of goods and services. It is an activity undertaken to earn a livelihood or to satisfy human wants.
The key characteristics of an economic activity are: \[\begin{array}{rl} \bullet & \text{It involves the use of scarce resources (like land, labor, capital).} \\ \bullet & \text{It is undertaken with an economic motive, i.e., to generate income or wealth.} \\ \bullet & \text{It results in the creation of goods or services that have value and can satisfy human needs.} \\ \end{array}\] Economic activities are broadly classified into three sectors: \begin{enumerate} \item Primary Sector: Activities that involve the direct extraction of natural resources. Examples include farming, mining, fishing, and forestry. \item Secondary Sector: Activities that transform raw materials into finished goods. Examples include manufacturing, construction, and food processing. \item Tertiary Sector: Activities that involve providing services. Examples include transportation, banking, teaching, and healthcare. \end{enumerate}