The correct option is (c) 1 and 3 only
Explanation
Economic activities are broadly classified into market activities and non-market activities based on the purpose of production and whether remuneration is involved. This classification helps in estimating the National Income.
Statement 1 is Correct:
Market activities involve remuneration to anyone who performs the activity. These are activities performed specifically for pay or profit. They result in the production of goods and services intended for sale or remuneration.
Statement 2 is Incorrect:
Market activities include the production of goods or services, including government service. Although government services (such as administration, defense, or public healthcare) may not always be sold in a traditional marketplace, the personnel performing them are remunerated, and the value of these services is included in the National Income. Therefore, they are not excluded from market activities.
Statement 3 is Correct:
Non-market activities are defined as production for self-consumption. These activities involve the consumption and processing of primary products (e.g., cultivation for own use) and own-account production of fixed assets. Since these are not undertaken for pay or profit, they are categorized as non-market activities.
Key Takeaway:
The defining characteristic of market activities is remuneration (pay or profit), which explicitly includes government services. Non-market activities are characterized by production for self-consumption.