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Economic Activities
• Economic activities are all the activities that are performed in exchange of some
material benefits.
• Any activity where two or more parties are involved in the exchange of material
benefits is referred to as the economic activity.
Examples
• Economic Activities: Services, business, shop keeping, buying, selling, services of
Doctors and advocates and all the activities where something of material value is
received and given by two or more parties.
• Non-economic activities: mothers affection to children, services to the friends and such
other activities where there is no exchange of material benefit.
• Begging is also not an economic activity though there is transfer of material benefit
Economics- Definition
• Economics is the study of Human activities related to satisfaction of unlimited wants
with limited means.
• It is a branch of knowledge that deals with human effort of acquisition, allocation and
utilization of limited resources to optimally satisfy unlimited wants.
Economics- Features
• Unlimited wants
• Scarce / Limited Resources
• Alternative uses of resources
• Goal of optimization
• Selectivity (Choice)
Economy/Economic system
• Is a the complex system of economic decision making units, their decision making
process, the exchange of resources among them and their influence in the decision
making process of each other.
Members of economy
• House hold
• Producer/ business firms
• Government
Members of economy: Household
• consumers of goods and services and suppliers of the productive resources
• Payer of Price for the goods and recipient of Rent, Wages and Interest
• Buyers of the Commodity Market and seller of the Factor Market.
Business Economics
• It is the application of microeconomic theory and methodology to decision making
situations faced by business and not business organizations.
• Managerial economics are the applications of those concepts and techniques of
Management and Economics that enables the managers to allocate the
organizational resources efficiently and to respond to the tactical issues effectively.
Features
• Blend of management and economic theories
• Provide quantitative tools for decision making
• Used with different purposes by different types of organizations
• Sometimes characterized by the use of macroeconomic theories