If Total Liabilities Increased by $30,000 and Stockholders' Equity Increased

question 6

Multiple Choice

If total liabilities increased by $30,000 and stockholders' equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

• A) $50,000 decrease
• B) $10,000 decrease
• C) $10,000 increase
• D) $50,000 increase

---

Definitions:

Long-Run Time Period

A duration in economics where all factors of production and costs are variable, allowing for complete adjustment.

Economies Of Scale

The economical benefits that businesses gain from their operation size, typically resulting in lower costs per unit of output as the scale expands.

Specialization

The process of focusing efforts and resources on a limited number of activities to increase efficiency and productivity.

Fixed Input

A resource in the production process whose quantity cannot easily be changed in the short term, such as buildings and machinery.