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Q100 (CAPF/2011) Economy › Basic Concepts & National Income › Market structure types Answer Verified

In which of the following types of economy ar.e the factors of production owned individually ?

Result
Your answer: —  Â·  Correct: A
Explanation

In a capitalist economy, also known as a free-market economy, the factors of production (land, labor, capital, and entrepreneurship) are owned and controlled by private individuals or groups of individuals [t1][t3]. This system is characterized by private enterprise where economic activities are driven by the motive of personal profit and decentralized decision-making [t1][t10]. In contrast, a socialist economy is defined by state or collective ownership of the means of production, where the government or a central authority determines resource allocation and production patterns [t1][t4]. A mixed economy incorporates elements of both, featuring a coexistence of public and private sectors where some resources are owned by the state and others by private entities [t1][t7]. Therefore, the specific type of economy where factors of production are owned individually is the capitalist system.

Sources

  1. [1] https://gacbe.ac.in/pdf/ematerial/18MCO13C-U2.pdf
  2. [2] https://www.investopedia.com/terms/f/factors-production.asp
  3. [3] https://www.investopedia.com/terms/m/mixed-economic-system.asp
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