Question

1. Explain in your own words the difference between capitalism and socialism. What are they both trying to achieve? In your answer, make sure you define both.

2. Explain a circumstance in business to which the problem of the commons/prisoner’s dilemma applies and why it applies to this circumstance.

Answer 1

These are two different questions. As per HOMEWORKLIB POLICY and guideline, the 1st question is answered below:

1.

Capitalism:

This is an economic system in which most of the economic activities (like production, distribution, etc.) are done through private ownerships in the profit motive attitude; such as the economic system in the US.

Socialism:

This is the government-controlled economic system in which no private ownership is entertained; such as the earlier economic system in the USSR.

Differences

Capitalism	Socialism
Private ownership in business.	Government ownership in business.
Profit motive attitude.	Social welfare attitude.
There is economic freedom, since the market demand and supply intersection decides price and quantity.	No economic freedom, since government regulate the market.
Competition exists in the market.	There is no competition, because there is only one owner, the government.
Society may not get equal distribution, since distribution depends on the act of business. Such as the salary of employees of a big business is high.	There is equal distribution system.

Achieve:

Capitalism is trying to achieve profit.

Socialism is trying to achieve social justice.