In a capitalist economy, the question 'for whom to produce' is settled…

Question

In a capitalist economy, the question 'for whom to produce' is settled mainly by an individual's:

Accepted Answer

B. Buying capacity, which depends on income

1. Goods are produced for those who can pay for them.
2. Buying capacity rests on income from work and property owned.
3. Higher income means higher buying capacity and demand.
4. Equal state entitlement and planning boards belong to socialism, so they are ruled out.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 1 Unit II "Basic Problems of an Economy and Role of Price Mechanism", p.3_

Answer

Membership in the central planning board

Answer

Equal entitlement guaranteed by the state

Answer

Position in a fixed social hierarchy

In a capitalist economy, the question 'for whom to produce' is settled mainly by an individual's:

Keep practising Unit 1A: Scarcity, Choice and Opportunity Cost