In which one of the following types of economy are the factors of production owned individually ?
Answer & explanation
Correct answer: option 1
The correct answer is Option 1: Capitalist
In a capitalist economy, the factors of production such as land, labour, capital, and enterprise are primarily owned by private individuals or private firms.
- Socialist Economy – In a socialist economy, the factors of production are mainly owned and controlled by the government or the state rather than private individuals.
- Mixed Economy – In a mixed economy, ownership of factors of production exists in both private and public sectors. Some industries are privately owned while others are controlled by the government.
- Communist Economy – In a communist economy, factors of production are collectively owned by the state or society, and private ownership is generally absent or highly restricted.
NCERT: "...Private Sector Industries are owned by individual investors. These are managed by private organisations. In capitalist countries, industries are generally owned privately.".