Question

Distinguish between capitalist economy and mixed economy.

Answer 1

Aspect	Capitalist Economy	Mixed Economy
Ownership of Means of Production	Owned by individuals/private sector.	Both private and public sectors coexist; ownership is shared.
Economic Motive	Profit motive is the primary driving factor.	Combination of profit motive and social welfare objectives.
Role of Government	Government has no interference; market forces govern all decisions regarding what, how and for whom to produce.	Government regulates private enterprises and may directly participate in production; it combines planning with market mechanisms.
Decision-Making	Entirely guided by market forces of supply and demand.	Mix of market mechanisms and government planning/controls.
Price Mechanism	Fully operational without interference.	Price mechanism exists but is regulated and controlled.
Examples	Pure market economy with minimal government intervention.	Most developing and developed countries with mixed systems like USA, UK, India.
Economic Goal	Individual profit maximization.	Achieving maximum social welfare by balancing private profits and public interests.