Which of the following best describes the economic basis for the private enterprise economic system?

• A. Centralized government planning of production and distribution
• B. Allocation of resources based solely on tradition and custom
• C. Private ownership of resources and the pursuit of profit
• D. Collective ownership of all property and resources

Answer: (C)

Verified step by step guidance

1. Understand the key characteristics of different economic systems: centralized planning, traditional allocation, private enterprise, and collective ownership.
2. Recognize that a private enterprise economic system is primarily defined by private ownership of resources, meaning individuals or businesses own the factors of production rather than the government or community.
3. Identify that in a private enterprise system, economic decisions such as production and distribution are driven by the pursuit of profit, which motivates individuals and firms to allocate resources efficiently.
4. Contrast this with centralized government planning, where the government controls production and distribution decisions, and with traditional systems, where customs dictate resource allocation.
5. Conclude that the economic basis for the private enterprise system is best described by private ownership of resources combined with the profit motive guiding economic activity.