Examples and Types of Economics Activities

 

 

 

 

Economic activities refer to the manner in which people utilize scares resources in order to satisfy their unlimited wants or those activities that have monetary value or rewards e.g. fishing, mining, cobbler.

All these economic activities are grouped into production and consumption i.e. production and consumption are the two main activities that takes place in an economy.

What is an economy? An economy is an area where production, distribution, exchange and consumption take place e.g. Cameroon.

In an economy those who carry out the transformation of resources (factors of production) into goods and services to satisfy human wants are known as producers. While those who make use of the commodities produced or used them for further production are known as consumers. Within an economy, economic activities include; production, consumption distribution and exchange.

Production:

It is the transformation of factors of production into goods and services needed for consumption and investment.

Exchange:

It is the sales and purchases of goods and services produced.

Distribution;

It is the movement of raw materials to the place of manufacture and finished goods to the consumers.

Consumption;

It refers to making use of goods and services produced to satisfy human wants or for further production.

However, there are two broad categories of activities that takes place in an economy that is production and consumption. This is because production includes distribution and exchange.

Economic is divided into micro economics which involves the study of individual decision units i.e. consumers household and firms. The way in which their decisions interrelate to determine prizes of factors of production and quantity bought and sold.