Capitalism

Question 1

What is capitalism

Answer 1

An economic system in which private individuals or businesses own capital goods.

Question 2

The production of goods and services is based on

Answer 2

Supply and demand in the general market - known as a market economy - rather than through central planning- known as a planned economy or command economy

Question 3

The purest form of capitalism is

Answer 3

free market or laissez-faire capitalism

Question 4

The liaises-faire marketplace operates without

Answer 4

Checks or controls

Question 5

Capitalism depends on the enforcement of private property rights

Answer 5

Which provide incentives for investment in and productive use of productive capital

Question 6

Capitalism developed historically out of previous systems of

Answer 6

Feudalism and mercantilism in Europe, and dramatically expanded industrialization and the large-scale availability of mass-market consumer goods.

Question 7

Pure capitalism can be contrasted with pure socialism (where all means of production are collective or state-owned) and

Answer 7

Mixed economies (which lie on a continuum between pure capitalism and pure socialism)

Question 8

The real-world practice of capitalism typically involves some degree of so-called ”crony capitalism” due to the demands from

Answer 8

Business for favorable government intervention and governments’ incentive to intervene in the economy.

Question 9

Private property rights are

Answer 9

Fundamental to capitalism

Question 10

Most modern concepts of private property stem from John locke’s theory of homesteadin, in which

Answer 10

Human beings claim ownership through mixing their labor with unclaimed resources.

Question 11

Once owned, the only legitimate means of transferring property are through

Answer 11

Voluntary exchange, gifts, inheritance, or re-homesteading of abandoned property.

Question 12

Private property promotes efficiency by

Answer 12

Giving the owner of resources an incentive to maximize the value of their property

Question 13

A capitalist society will rely on the use of

Answer 13

Contracts, fair dealing, and tort law to facilitate and enforce these private property rights

Question 14

When a property is not privately owned but shared by the public,

Answer 14

A problem known as the tragedy of the commons can emerge

Question 15

Profits are closely associated with the concept of

Answer 15

Private property

Question 16

By definition, an individual only enters into a voluntary exchange of

Answer 16

Private property when they believe the exchange benefits them in some psychic or material way.