Question

Capitalism — a social political-economic system characterized by individual or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

Socialism — a political-economic system of social organization in which the means of producing and distributing goods is owned collectively by the community and is administered and distributed by a centralized government. Which statement differentiates capitalism from socialism?

a) Ownership by the community
b) Centralized government control
c) Competition in a free market
d) Individual ownership of capital goods

Answer 1

The statement 'Individual ownership of capital goods' best differentiates capitalism, where private ownership is central, from socialism, which emphasizes collective or government ownership and control.

Step-by-step explanation:

The statement that differentiates capitalism from socialism is d) Individual ownership of capital goods.

In a capitalist economic system, private ownership is central, with individuals and corporations owning the means of producing and distributing goods. These owners make decisions based on the pursuit of profit, and the market is characterized by competition and voluntary exchange.

Conversely, socialism emphasizes ownership by the community or centralized government control, where the means of production are collectively owned and the government plays a significant role in the distribution and allocation of resources. The primary goal in socialism is to benefit society as a whole, rather than individual profits.