A capitalist economy can be defined as an economy in which most of the economic activities have the following characteristics.

(A) Sale and purchase of labour services at their own price.

(B) Sale and purchase of labour services at the wage rate.

(C) Production takes place for selling.

(D) Authorities may intervene to achieve an equitable distribution of the final mix of goods and services.

Choose the correct answer from the options given below:

Option 1 -> Excludes (B) which is essential as labor services are sold at wage rates in capitalism.

Option 2 -> Excludes (C) which is fundamental - capitalist production is for market exchange.

Option 3 -> Includes (A) which uses vague terminology "their own price" instead of the precise "wage rate".

Option 4 -> Correctly includes (B) wage-based labor, (C) production for selling, and (D) government intervention in modern capitalism.

Hence, Option 4: (B), (C) and (D) only -> In a capitalist economy: (B) Labor is treated as a commodity sold at market-determined wage rates; (C) Production occurs primarily for profit through market sales rather than direct consumption; (D) Modern capitalist economies typically involve government intervention to address market failures and ensure equitable distribution. Option (A) is excluded because "at their own price" is imprecise - the correct term is "wage rate" as specified in (B). -> correct