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Sunday, 1 November 2020

Discuss in detail about economic activities

Today we know about economic activities have several distinguishing characteristics other than the motive of earning a livelihood. Let us be more aware of these. In the process, 

we shall also be able to situate business as an economic activity.

1. Economic activities are income generating: 

one main on a livelihood in several ways. For example, income earned by rendering personal time, physical and psychic energy in other words through one's sweat and intellect is called earned income. And the income earned by letting out one's property is called property income full stop in economics, individuals comprise processes of one or more of factors of production, labor and capital and entrepreneurship. The corresponding income characterizations in exchange for or compensation of their factor services are wages and salaries, rent, interest, and profit. It is not necessary that all these incomes may be earned in the form of money only. These may be earned in kind too. For example, a landowner main compensates the tiller of the land in the form of food grains. The nomadic pestors who brought their herds to graze the stubs left of the harvest were often paid in the form of food grains. How much its factor will earn? The factors on according to their contribution to the production. In other words income is generated in the process of production.


2. Economic activities are productive: 

Man cannot create matter. But using ingenuity,men can transform matter variously to produce the goods and services for the satisfaction of various needs. Production essentially is the process of creation of need satisfying goods and services. As a corollary,earning of a livelihood implies participation in the process of production. When the early man set out to hunting the animals and gathering the fruit and firewood, he engaged in productive activities. Farming is the productive too. Practice of the crafts-pottery, textiles -is an instance of productive activities.generation of electricity, manufacture of automobiles and writing of software programs are all instances of productive activities. Teaching, medicine, law and accountancy are all productive activities. Production may be done either of substance that is self-conceptions or for market a full stop production represents the supply side of economics, more so if it is for market. Here its scope is is pretended not only to include the place where it takes place but also the entire range of activities and occupations devoted to delivering the production to the markets-transport warehousing, intermediaries (example wholesalers / dealers, retailers etc.) and so on.


3. Even consumption is an economic activity: 

conjunction represents the demand side of economics that is the goods and services on which the people will spend their income. Production is is organised in response to the demand. Different products compete for buyers attention and pending. Infect every unit of demand is like a vote in favour of a product and a single to its producer.


4. Savings, investment and wealth:

unspent income comprises savings. The financial sector haifan banks non-banking financial components mutual funds, dealers in stock markets, real estate, gold etc. Are the channels through which the savings are converted into investment and wealth. The corporate sector and the government borrow the savings and invest the ease and operating civil military and business infrastructure and other productive pursuits.


Business is an economic activity-we have seen that market oriented production (better than production for self consumption) represent supply side of economics. It is common to refer to shift from subsistence driven production toward market driven production as commercialization of production or production on a commercial scale.we have also seen that for the production to occur at a commercial scale a wide array of interconnected activities need to be put in place of for linking production supply side with consumption demand side. With this background we can now attempt a three-tier definition of business.


from the border prospective business may be defined as an economic activity comprising the entire spectrum of activities pertaining to production, distribution, and trading exchange of goods and services. as such it refers to the aggregate of all the business and industry (construction and manufacturing), trading or service enterprises; state-owned / public sector or private enterprises; proprietary or corporate sector enterprises; micro, small, medium, or large enterprises; domestic or multinational enterprises. It is usual to classify business into the industry, trade, and commerce; the letter incorporating all the industry-trade-related services or auxiliary/ aids to trade such as banking, general insurance company transport warehousing, etc.


Hair question arises: is agriculture and industry and hence a business question mark its answer is  "it depends".in India, much of the agriculture is subsistence agriculture. Moreover, agriculture income, under the income tax act is characterized separately from income from business and profession and is exempt from tax. Thus, for our purpose agriculture does not comprise industry and hence business full stop however, the manufactures where agricultural produce is processed and whose ki material ingredients are agricultural produce do comprise and industry. for example, the extraction of edible oil from rice bran korma mustard, coconut, soybean, etc., Represents agro-based industries.


From the medium perspective, business refers to a particular type of activity or industries such as retail business coma real estate business and IT business, iron and steel industry, transport business, etc. Thus, a firm may introduce itself as follows: "We are a food processing" unit.

For in aro prospective business maybe define as one's usual occupation for creating owning and activity operating and economic organization that i.e., a firm. The phrase usual occupation is important for infrequent, isolated transactions even if this might result in profit or loss, cannot be called business.

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