Question

Which of the following is an economic activity?

• A. Listening to music on the radio
• B. Teaching one's own son at home
• C. Medical Facilities rendered by a Charitable Dispensary
• D. A Housewife doing household duties

Answer 1

Answer: (C)

The definition of an economic activity is given as "any activity where goods and services are exchanged for money."

The economic activity of production involves producing goods and services so that they can be sold in the market for fair price. The medical facilities rendered by a charitable dispensary is thus considered an economic activity as even though the charity may not sell its services, it still costs money to buy all the supplies and pay the staff in charge. They usually obtain the funds for this from donations. Thus since money is still being exchanged for goods and services and thus it must be an economic activity.

Since money is not being exchanged for goods and services in any of the other situations, it is not considered an economic activity.