Capitalism Is an Economic System in Which

question 131

Multiple Choice

Capitalism is an economic system in which

• A) the means of production are largely in private hands, and the main incentive for economic activity is the accumulation of profits.
• B) all property is communally owned and no social distinctions are made on the basis of people's ability to produce.
• C) the means of production and distribution are collectively owned.
• D) None of these answers is correct.

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Definitions:

Total Cost

The complete cost of production, including both fixed and variable costs, incurred by a business in producing its goods or services.

Marginal Cost

The increase in total cost that arises from producing an additional unit of output.

Lawn-mowing

The act of cutting the grass in a garden or lawn to maintain its appearance and health.

Perfectly Competitive

A market structure where many firms offer a homogeneous product, there are no barriers to entry or exit, and all firms are price takers.