Massachusetts Tests for Educator Licensure (MTEL) Practice Test 2026 – Comprehensive All-in-One Preparation Guide for Exam Success

The correct answer, which identifies the economic system that emphasizes individual ownership and free market principles, is capitalism. In a capitalist system, private individuals and businesses own the means of production and are responsible for the distribution of goods and services. This system operates on the basis of supply and demand, where prices are set in a free market rather than being determined by a central authority.

Capitalism encourages competition, innovation, and consumer choice, allowing individuals to pursue their economic interests freely. This emphasis on individual ownership means that entrepreneurs and investors can obtain and develop resources according to their own decisions, often leading to economic growth and higher living standards.

Socialism, on the other hand, promotes collective or governmental ownership of the means of production, aiming to distribute resources more equally among the population rather than allowing individual ownership and market forces to drive the economy.

Communism takes this a step further by advocating for a classless society where all property is publicly owned, and each person works and is paid according to their abilities and needs, eliminating the concept of individual ownership entirely.

Feudalism is an entirely different economic and social system that was prevalent in medieval Europe, characterized by a hierarchy of lords, vassals, and serfs, with land ownership being tied