Question

Can anyone explain the three components of economy activities?

Answer 1

Answer:

no I cannot coz I haven't study economics

Answer 2

There are three distinct components of Economic Activity:

1. Consumption
2. Production
3. Distribution

1. Consumption:-

• It includes the study of human behaviour as a consumer or buyer of goods and services for the satisfaction of their wants.

• As a consumer, they have limited means(money), while their wants are unlimited.

• HOW do they allocate their given means to the purchase of different goods and services, so that their satisfaction is maximised? This is called the study of consumption.

2. Production :-

• Producers also have limited means, while they have wide range of goods and services to choose from their firm and factories.

• Given prices of goods, how do they choose such combination which are least expensive, so that they able to minimise the cost of production.

• And how do they choose to produce those, which offers them maximum revenue. This is called the study of production.

3. Distribution :-

• It includes the study of, how do they distribute the income in agents of production.

• Distribution of income refers to the distribution of GDP, among the owners of the factors of production like land, labour, capital, and entrepreneurs.

• These economic principles are called the study/theory of distribution.