What are the economic activities?

All the activities performed to earn money to satisfy our needs and wants are called Economic activities. They include:

a. Production

Activities that produce goods and services. (Agriculture)

b. Consumption

All the activities in which all the produced goods are bought for the purpose of satisfying our wants and needs is known as consumption. (Buying Ice-cream)

c. Exchange

When there is an interaction between two parties, generally the buyer and the seller for the purpose of exchanging goods and services, which satisfies the needs of both of them. (Transportation: Buyer hires a transporter to transport is apples in EXCHANGE for money)

d. Distribution

All the income generated through all the activities, such as production, consumption, and exchange, must be redistributed to the factors of production (Entrepreneur, land, labor, and capital). These lead to the price discovery of factors of production.

An activity can easily move in and out of “economic activity”. Example - women teaching his son to cook for free are not an economic activity, but charging fees to other student is an economic activity.