Which of the following best contrasts capitalism and socialism in terms of ownership, planning, and distribution of resources?

• A. Capitalism relies on central planning; socialism relies on free markets.
• B. Capitalism emphasizes private ownership and market allocation; socialism emphasizes public ownership or planning and more equal distribution.
• C. Capitalism emphasizes equality of outcome; socialism emphasizes equality of opportunity.
• D. Capitalism rejects market signals; socialism uses price mechanisms.

Answer: (B)

Ownership, planning, and how resources are distributed are the big levers that separate capitalist and socialist systems. In capitalism, means of production are largely owned privately, decisions about what to produce come from individuals and firms operating in markets, and goods and services are distributed through voluntary exchange guided by prices. In socialism, ownership is typically public or collective, decisions are guided by planning or coordinated decisions, and distribution aims for more equal outcomes through state action or democratic planning.

This is why the best choice matches: capitalism emphasizes private ownership and market allocation; socialism emphasizes public ownership or planning and more equal distribution.

Other options mix up these ideas: central planning is paired with capitalism, which is incorrect; equality of outcome vs opportunity is not the standard way to define the two systems here; and price mechanisms are central to capitalism, not rejected by it, while this choice incorrectly assigns price mechanisms to socialism.