Economic and Non Economic Activities

Economic and Non Economic Activities 

Economic and Non Economic Activities- An activity performed by a human being to meet his wants is known as ‘Human Activity’. Some of the human activities are performed to earn money, while some are undertaken to achieve personal satisfaction.


All those activities which are done by human being in the morning to evening, Day and night are called  human activities. There are two types of human activities-

1.Economic  Activities

2.Non Economic Activities

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Economic and Non Economic Activities-

1.Economic Activities-

Economic activities refer to those activities, which are undertaken to earn a living.


The human activities that are undertaken with an objective to earn money are called economic activities.


Economic activities are concerned with the production , exchange and distribution of goods and rendering of services to earn money.


Those  human activities which are carried out to earn a living for the satisfaction of human wants are known as Economic Activities.

Examples of Economic Activities-

A manufacturer busy in making products .

A doctor busy in running his clinic.

A shopkeeper selling groceries.

A tailor stitching clothes.

A farmer busy in farming.

A teacher teaches in a school.

A Workers works in a office.

A clerk working in a government office.

A Lawyer practices in a court.

Transportation of goods and passengers.

Types of Economic Activities-

There are three types of human activities-

1.Business- Business refers to those economic activities which are connected with  the production, sales, transfer and exchange of goods and services on regular basis undertaken with the motive of earning profit with element of Risk by satisfying human needs in the society. Business should be Lawful. Every business requires some investment in cash or kind or both.

Features of Business-

1.An Economic activity: It means an activity aimed at earning money. Business is also aimed at earning money or livelihood by satisfying human needs.

2.Production and procurement of goods and services: Every business enterprise must either manufacture the goods or it acquires from producers. Goods may be consumer goods or Capital goods. Services means facility offered to consumers like Banking, Insurance, Transportation etc.

3.Sale, Transfer or exchange of goods and services: Business involves sale, transfer or exchange of goods and service for consideration.

4.Dealing in goods and services on a regular basis: It should be a regular activity. One time sale, transfer or exchange will not be considered as business.

5. Profit earning: Business always aims at earning profit. Profit is the reward of risk.

6.Uncertainty of earning: There is always a possibility of less amount of profit or even loss in business.

7.Element of Risk: There is always a possibility of Uncertainty of earnings.

8.Creation of utilities: An important characteristic of business is the creation of utilities is goods so that consumers may use them. When raw material is converted into finished goods, it creats form utility. When it is stored and brought into the market when needed, then time utility is created.

2.Profession- Profession includes All those economic activities which require special knowledge, professional training and skill to be applied by  individuals in their occupation to earn fees. Those people engaged in professions are known as professionals. Like Doctors, Chartered Accountants, Engineers,Lawyers, Architects, Film-stars, Dancers, Artists etc.

Features of Profession-

1.Profession is an occupation for which the individual has to acquire a special knowledge and skill.

2.The money they get for providing such a service is usually known as ‘fee’.

3. Most of the professionals are regulated by a professional body, which frames the code of conduct to be followed by the member professionals. For example, Chartered Accountants in India are regulated by a professional body known as Institutes of Chartered Accountants of India, Cricketers by International Cricket Council (ICC), Lawyers are regulated by  Bar Council of India, Doctors Regulated by Medical council of India , and so on.

4.Professionals acquire the specialised knowledge mostly from colleges, universities or specialised institutes.

In some cases, individuals also acquire such knowledge and skill through training or coaching by an expert in the same field, say for example, dancers and musicians, etc.

5. Professionals usually work on their own and get a fee for their services and termed as those in practice. However, some of them may work in organisations as employees or consultants.

6.The primary objective of every profession is to provide service though they may charge a fee. They should not exploit the people using their knowledge of expertise.

3. Employment- Employment is an economic activity, it refers to the occupation in which people work for others under a contract of service and get some remuneration in return, in the form of Wages or Salaries . The persons who work for others are called ‘Employees’.

Features of employment-

1.Employer  And Employee –It is an occupation where a person (called employee) is to work for another (called employer).

2. Terms And Conditions- There are certain terms and conditions of work like hours of work (how many hours a day), duration of work (how many days or hours in a week or month etc.), leave facility, salary/wages, place of work etc.

3.Reward or Return-  The employees get salary (normally paid on a monthly basis) or wage (normally paid on daily/weekly basis) in return of their work. This amount is normally predetermined, mutually agreed upon and may increase over time.

4.Contractual Relation- Legally the employer-employee relationship is based on a contract and any deviation from any side permits the other party to take legal recourse.

5.Qualification- There are jobs for which no technical education or specialised skill is required for employment. But, for skilled jobs, specialised jobs and technical jobs, a certain level of basic/technical education is required.

6. The main purpose behind employment is to secure /assured income through wages and salaries.

2.Non Economic Activities-

Non-Economic Activities refer to those activities, which are undertaken to satisfy social, psychological and emotional needs. For example, housewife cooking food for her family, a teacher teaching his own son, attending a social gathering, etc.


The human activities that are not undertaken with an objective to earn money or monetary gain are called noneconomic activities


The human  activities which are accomplished to fulfill personal, social, religious, emotional, spiritual and cultural needs are known as Non-economic activities.

Whose aim generally is to derive pleasure in one’s idle time.(Vacation-Time Activities)

Which are inspired by love for family.(Family-Obligation Activities)

Which are inspired by need for mental satisfaction and happiness.(Religious and Cultural Activities)

Which are inspired by the emotional feeling of sympathy for others.(Social Welfare Activities)

Examples of Non Economic Activities-

Worshipping God and visiting the temple.

A girl is crossing the road to her old grandmother.

The Mother is loving her child.

One child is doing Yoga.

Making painting for pleasure.

People are walking in the Morning.

Woman cooking food at home for her husband and children.

A teacher teaching to his/her own children at home.

A doctor treating his family members.

participation on relief camp to help people affected by war, natural calamities.

Economic and Non Economic Activities-

Motive: Economic and Non Economic Activities

 Economic Activities,The main objective is to earn money or acquire wealth. Non-Economic Activities,

The main objective is to get some sort of self satisfaction which is main difference between Economic and Non Economic Activities

Measurement of Result: Economic and Non Economic Activities

 Economic Activities, Result can be measured in terms of Money. NonEconomic Activities,

The result cannot be measured in terms of Money.

Time:Economic and Non Economic Activities

 Economic Activities,Economics activities are performed on regular basis. NonEconomic Activities,

Most of these activities are not regular. These activities are performed during spare time and they are limited.

Resources: Economic and Non Economic Activities

4. Economic Activities, involve proper allocation  and optimum use of resource. NonEconomic Activities,

not involve proper allocation and optimum use of resource

Result: Economic and Non Economic Activities

5. Economic Activities,The end result of these activities is production of goods and services. NonEconomic Activities, The end result of these activities is mental satisfaction of person performing them.

Expectation: Economic and Non Economic Activities

7. Economic Activities, Money is expected from such activities. NonEconomic Activities,The expectation of such activities is to get self satisfaction.

EXAMPLES: Economic and Non Economic Activities

6. Examples of Economic Activities, Business, profession and Employment.Examples of Non-Economic Activities,Family Function, religious, social, cultural activities.

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Difference Between Business, Profession and Employment-

Difference Business Profession Employment
Objective The main objective is to earn profit The main objective is to provide service to people in return of fees. The main objective is to provide service under the circumstance of a bond between the employer and employee.
Special knowledge No special knowledge is required. Profession requires special study on certain subjects. Requires special knowledge but not very high
Work Production of goods and service Provision of services. Working under another person.
Risk Business has the element of high risk of less profit and loss. Profession has the element of low risk of loss. Employment do not have any element of risk
Name Person who manages and invest in the business called Proprietor. The person who are engaged in their professions are known as Professionals The person who works for others are known as Employee
Investment It requires investment as per the size and nature of the business It require limited capitals for establishment No capital is required
Qualification Does not requires minimum qualifications. It requires expertise training in certain fields. It required qualifications prescribed by employer.
Example Business enterprises Doctor, Lawyer etc. Person working in a business enterprises.









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