Capitalist Economy Concepts and Mechanisms

The video tutorial explores central economic problems and how different economies address them. It focuses on capitalist economies, detailing their characteristics, such as private ownership and profit motive. The tutorial explains how these economies solve economic problems using market forces and price mechanisms. It also discusses the merits, like innovation and efficiency, and demerits, such as income inequality and monopolies, of capitalist systems.

What are the three types of economies discussed in the video?

• Industrial, Agricultural, Service

• Capitalist, Socialist, Mixed

• Developed, Developing, Underdeveloped

• Traditional, Command, Market

Which characteristic is NOT associated with a capitalist economy?

• Government ownership of all resources

• Right of private property

• Freedom of enterprise

• Consumer sovereignty

How do capitalist economies decide what to produce?

• Through random selection

• By following traditional methods

• Based on consumer preferences

• Through government planning

What mechanism do capitalist economies use to solve their central economic problems?

• Government intervention

• Price mechanism

• Barter system

• Central planning

Which of the following is a merit of a capitalist economy?

• Limited consumer choice

• Equal income distribution

• High standard of living

• Lack of innovation

What is one reason capitalist economies often have a high standard of living?

• Government control of resources

• Limited competition

• Lack of consumer choice

• Freedom of enterprise

Which of the following is considered a demerit of a capitalist economy?

• Creation of monopolies

• Focus on welfare

• Equal income distribution

• Centralized economic planning

Why might necessary goods be underproduced in a capitalist economy?

• They are not profitable

• They are too expensive to produce

• They are controlled by the government

• They are not in demand

What is a common criticism regarding income distribution in capitalist economies?

• It is too equal

• It is based on need

• It leads to income disparity

• It is controlled by the government

What is another name for a capitalist economy mentioned in the video?

• Free market economy

• Traditional economy

• Command economy

• Mixed economy