3.1: Introduction to the Fundamentals of Capitalism

Question 1

What assumption is made about the Canadian economic system?

Answer 1

The assumption is that the Canadian economic system is largely composed of business enterprises operating in a market system.

Most goods and services wanted by Canadians are provided by this market system.

Question 2

Do only for-profit organizations provide value in the Canadian market system?

Answer 2

No. Both for-profit and non-profit organizations provide value.

For example, there are approximately 86,000 registered charities in Canada, which contribute 13.3% of the GDP, not including volunteer activities.

Question 3

Why is a market system often seen as more efficient than a centralized government-operated system?

Answer 3

It is argued that the market system is less cumbersome, less costly to run, and more responsive to society’s needs because it allows individuals and businesses to innovate.

Question 4

What is capitalism in practice according to the Everyday Ethics section?

Answer 4

In a capitalist system, business enterprises are responsible for providing most goods and services.

While most are provided without issue, ethical concerns can arise related to the fundamental aspects of capitalism.

Question 5

What are the eight fundamentals of capitalism identified in this section?

Answer 5

The eight fundamentals of capitalism are:

Private property

Equality of opportunity

Competition

Individualism and economic freedom

Profits

Work ethic

Consumer sovereignty

Role of government

Question 6

What is required for capitalism to function properly according to the theory?

Answer 6

Capitalism requires a strong system of ethical behavior. Without it, the government and justice system will intervene to address economic, social, and ethical challenges.