Question

Economic activities are the activities that add value to the national income. And market activities and non-market activities are two parts of economic activity.” But why is a non-market activity considered as an economic activity, when it is only done for self-consumption? Shouldn’t it be a non-economic activity? If not, how exactly is it adding the value of the national income?

Answer 1

Answer:

Market activity refers to the economic activity which includes the production and consumption of goods. These are performed for pay or profit. For example a teacher training in a school, a man working in the bank.

Non-marketing activities include things which are not economic and comprises of the exchange system. These are performed for self-consumption. For example subsistence farming, processing of primary products, etc.

Explanation:

Value added refers to the addition of value to the raw material (intermediate goods) by a firm, by virtue of its productive activities. It is the contribution of an enterprise to the current flow of goods and services. It is calculated as the difference between value of output and value of intermediate consumption.

Thanks!