In which of the following economic systems do we have the means of production and exchange controlled by private individuals

Step 1: Analyze the question The question asks which economic system has the means of production (land, labour, capital, factories) and exchange (trade and markets) controlled by private individuals.

Step 2: Explain the concept Economic systems differ in who owns and controls resources:

• Socialist system: The state or government owns and controls the major means of production and exchange.
• Mixed system: Ownership is shared between the private sector and the government. Nigeria is an example, with private businesses alongside government-owned ones such as NNPC.
• Capitalist system: Private individuals and firms own and control the means of production, driven by the profit motive, free enterprise and the price mechanism. The USA is a typical example.
• Traditional system: Production is based on custom, family or community ownership, with subsistence farming and barter. It is not mainly about private control.

Step 3: Solve by elimination

• A is wrong because socialism means government control.
• B is wrong because a mixed system is not entirely private; the government also participates.
• D is wrong because a traditional system is guided by custom and communal practice.
• C is correct because capitalism is defined by private ownership and control of production and exchange.

Answer: C. Capitalist system

Exam tip: Match the keyword to the system:

• Private → Capitalist
• Government/State → Socialist
• Both → Mixed
• Custom/Barter → Traditional

Well done for working through this carefully. Keep practising questions like this and you will get faster at them.