Business Basics: quick revision, 8 bites

Economic vs Non-Economic Activities

All human activities split into two types.

Every human activity falls into one of two broad categories: **economic activities** (done for money or material gain) and **non-economic activities** (done for personal satisfaction, charity, or religion).

Takeaway. Economic activities aim at earning money; non-economic activities satisfy sentiments.

Economic Activities Defined

Money-driven actions that create wealth.

**Economic activities** are all human activities related to the **production, exchange, distribution, and consumption** of wealth. They are performed to satisfy material needs or earn money.

Takeaway. Economic activities are directly linked to money and wealth.

Non-Economic Activities

Done for heart, not for money.

**Non-economic activities** are performed to satisfy human sentiments such as **charity, religion, recreation**, etc. They do not aim at earning money.

Takeaway. Non-economic activities are motivated by emotions, not profit.

Economic Activities = Business + Profession + Employment

The three pillars of economic activity.

Takeaway. Remember this equation to classify economic activities.

Economic vs Non-Economic: Key Differences

Money vs sentiment.

Takeaway. Economic activities are money-driven; non-economic are emotion-driven.

Real-Life Examples

See the difference in daily life.

Takeaway. Daily hustle is mostly economic activity.

Remember: PEDC

Four steps of economic activity.

Use the acronym **PEDC** to remember the components of economic activities: **P**roduction, **E**xchange, **D**istribution, **C**onsumption.

Takeaway. PEDC helps recall the four wealth-related activities.

Exam Tip: Classify Correctly

Don't mix up the two types.

Takeaway. Money is the key indicator for economic activity.