I. Meaning of Economy:

1. The economy is concerned with production, exchange, distribution and consumption of goods and services.

2. If human beings have to survive, they have to eat. They are not like other animals that are parasites on nature and consume its raw products. Human beings not only produce what they need for their sustenance, but also transform the raw products of nature by cooking and processing them.

3. One of the remarkable characteristics of human beings is that they transform the raw into the cooked. Fire making and the use of fire are associated principally with human species.

4. None of the activities associated with the economy are carried out in isolation. In their system of production, human beings enter into relations with other human beings.

5. Distribution and exchange also assume the existence of relations between people. The nature of these relations conditions the quality of distribution and exchange, and the quality of the things (goods and services) exchanged.

6. Human relations and social values also determine the patterns of consumption.

7. In other words, in a sociological study of the economy, one is concerned with the social rélations that are built in the systems of production, distribution and exchange, and consumption. 

II. Characteristics of Economic Organization: 

(a) So far we have learnt that the economy or the economic system consists of those institutions that provide for the production, distribution and exchange and consumption of goods and services. In this section, our concern will be with the characteristics of economic organization.

(b) Generally when we think of the economy we think of goods and services involving money. A teacher teaches in a school for a month, at the end of which he receives a certain amount of money in the form of currency notes and coins. He spends the latter for buying goods and services, for instance, food, haircuts, travel tickets, etc. that he needs for his survival.

(c) However we should note that there are societies where the concept of money as we understand it does not exist. By money, we mean a standardized unit of exchange, by which we can buy anything we need, whether a commodity or service. Societies like tribal and peasant, which do not have the concept of money, are called non- monetized (or unmonetized).

(d) Division of labour is found in economic organization.

(e) Modern economy is called industrial economy.

(f) There are several types of economic systems depending upon the ways in which people acquire their livelihood. Broadly speaking we may divide the economic system into-two types, those concerned with food collection, and secondly those concerned with food production.