The difference between Economic and Non-economic activities

Economic and non economic act

The main difference between Economic and Non-economic activities is money. All those activities generating money or profit are called economic activities but non-economic activities are only concerned with the welfare of people and these activities are performed only for mental peace and happiness.

Free Accounting book Solution - Class 11 and Class 12

To know about the differences in both the terms, we have to know the meaning of both the terms which are shown below:

1. Meaning of Economic activities:

Occupations, jobs, or activities which are performed by the people with the purpose of obtaining profit are called economic activities. The purpose of these activities is to create wealth or assets for the business.

For example:

The production sector is where goods are produced to earn profit/income. like the Producers produce Maggi, chips, and coke, etc. 

2. Meaning of non-economic activities:

Activities that are related to the psychological satisfaction of the people are known as non-economic activities. The result of these activities is not to create wealth but it gives mental satisfaction. Such kind of activities provides happiness and peace to the people.

For example: 

  1. Paying charity, social service(providing food to below the poverty line people.
  2. Providing shelter to homeless people), any work related to the safety of the environment.

It also includes family-oriented activities(helping family members in their work).

3. The Chart of difference:

Points of differences

 Economic activities

 Non-Economic activities

Meaning Activities that are performed by the people with the purpose of obtaining profit are called economic activities. Activities that are related to the psychological satisfaction of the people are known as non-economic activities.
Purpose  Earning Profits or gains. for getting Psychological satisfaction.
Result Production of goods and services. The human got Mental satisfaction.
Examples No. 1 Business, profession, and employment. Religious, social service, and other welfare activities.
Examples No. 2 It involved selling and buying activities. Cooking food for family members or providing free food to poor people etc.
Role of money Money is the basic element and without money, no activity would be completed. There is no function related to money.
Knowlege/degree Doctors, lawyers, teachers, and managers need special knowledge and degree to do their activities.   The non-economic activity can be performed by any person and there is no need to do any special degree.
Basis of risk Risk and uncertainty are involved in the business. There is no risk regarding any activity.
Regularity in activities Regularity is a must in the business.

It may or may not be regular in nature.

Download the chart in PNG and PDF:-

If you want to download the chart please download the following image and PDF file:-

The Chart of difference between Economic and Non economic activities 1 min 150x150 - The difference between Economic and Non-economic activities
The Chart of difference 
application pdf 150x150 - The difference between Economic and Non-economic activities
The Chart of difference

 

 

 

 

 

Conclusion:

Thus, economic activities are concerned with obtaining/generating profit whereas, non-economic activities are concerned with the welfare of the people. In other words, economic activities generate value for the nation but non-economic activities do not add any value to the nation.

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References: –

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Also, Check our Tutorial on the following subjects: 

  1. https://tutorstips.com/financial-accounting/
  2. https://tutorstips.com/advanced-financial-accounting-tutorial/

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