The economic system in which all the means of production are owned and controlled by private individuals for profit...
Options
ASocialism
BCapitalism
CMixed economy
DCommunism
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Introduction to Business EconomicsPYQ Jun 23Question 653 of 209
All Questions Correct Answer
✅ Option b — Capitalism
All Options:
- ASocialism
- BCapitalism
- CMixed economy
- DCommunism
Detailed Solution & Explanation
• The question describes an economic system where private individuals own and control the means of production (like factories, land, and capital) with the primary goal of making a profit.
• This definition perfectly aligns with Capitalism. In a capitalist system, resources are largely privately owned, and economic decisions are driven by market forces and the pursuit of individual gain. This leads to competition and innovation.
• Option (A) Socialism is incorrect because in socialism, the means of production are primarily owned and controlled by the state or the community, not private individuals, with the aim of social welfare rather than private profit.
• Option (D) Communism is also incorrect. Communism is an extreme form of socialism where the means of production are collectively owned by the community as a whole, and there is no private property or profit motive. It aims for a classless society.
• Option (C) Mixed economy is incorrect because while it includes elements of private ownership and market forces, it also involves significant government intervention and public ownership, balancing private profit with social welfare. It's a blend, not solely private ownership for profit.
About This Chapter: Introduction to Business Economics
Paper
Paper 4: Business Economics
Weightage
5%
Key Topics
Meaning, Scope, Price Mechanism
This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.
View Official ICAI SyllabusExam Strategy Tip
Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.
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