Discuss the three main economic activities.
Discuss the three main economic activities.
The three components of economics are :
(a) Consumption: As consumers people have limited means, while their wants are unlimited. The way in which they allocate their given income on the purchase of different goods and services so that their satisfaction is maximized constitutes the study of consumption.
(b) Production: Producers also have limited means while they have a wide range of goods and services to choose from their firms and factories. Given the prices of different inputs, how they choose a combination which is least expensive, so that they are able to minimize their cost of production constitutes the study of production.
(c) Distribution: Different economic principles on the basis of which income is distributed among owners of the factors of production, such a study is called distributed among owners of the factors of production, such a study is called distribution theory in economics.
The three components of economics are :
(a) Consumption: As consumers people have limited means, while their wants are unlimited. The way in which they allocate their given income on the purchase of different goods and services so that their satisfaction is maximized constitutes the study of consumption.
(b) Production: Producers also have limited means while they have a wide range of goods and services to choose from their firms and factories. Given the prices of different inputs, how they choose a combination which is least expensive, so that they are able to minimize their cost of production constitutes the study of production.
(c) Distribution: Different economic principles on the basis of which income is distributed among owners of the factors of production, such a study is called distributed among owners of the factors of production, such a study is called distribution theory in economics.
