Exploitation and inequality are minimal under
Options
ASocialism
BCapitalism
CMixed economy
DNone of the above.
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Introduction to Business EconomicsMTP Mar 18Question 708 of 209
All Questions Correct Answer
✅ Option a — Socialism
All Options:
- ASocialism
- BCapitalism
- CMixed economy
- DNone of the above.
Detailed Solution & Explanation
• The question asks about the economic system where exploitation and inequality are minimal. This points to a system designed to reduce disparities.
• Socialism is an economic system where the means of production (factories, land, resources) are largely owned and controlled by the state or the community, rather than private individuals. The primary goal of socialism is to achieve social equality and collective welfare.
• Under socialism, the government plans production and distribution to meet societal needs, not just to maximize private profit. This central planning aims to ensure that resources are allocated equitably, and that basic necessities are available to all citizens.
• Because the state controls key industries and aims for equitable distribution, the potential for private individuals or corporations to exploit labor or accumulate vast wealth at the expense of others is significantly reduced. Income and wealth disparities tend to be lower compared to other systems.
• Therefore, socialism is the correct answer as its fundamental principles are geared towards minimizing exploitation and inequality.
• Capitalism (Option B) is incorrect because it is characterized by private ownership of the means of production and a free market. While it can lead to innovation and growth, it often results in significant income inequality and potential for exploitation due to the profit motive and competition. Owners of capital can accumulate wealth, while workers may face lower wages if labor supply is high.
• A Mixed Economy (Option C) combines elements of both capitalism and socialism. While it includes government intervention to address some inequalities, it still retains significant private ownership and market mechanisms, meaning exploitation and inequality, though potentially less than pure capitalism, are not minimal compared to a purely socialist system.
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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