The Owner's Equity of Logan's Company Is Equal to One-Half

question 72

Multiple Choice

The Owner's Equity of Logan's Company is equal to one-half of the total Assets. Liabilities equal $90,000. What is the amount of Owner's Equity?

• A) $45,000
• B) $90,000
• C) $135,000
• D) None of these answers is correct.

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Definitions:

Utility Maximization

The economic principle stating individuals aim to achieve the highest satisfaction possible from consumption given their income and prices of goods.

Diminishing Marginal Utility

A principle stating that as more of a good or service is consumed, the additional satisfaction from consuming one more unit decreases.

Income Effect

The impact of income changes on the demand for goods or services by an individual or within the economy.

Substitution Effect

Describes how consumers react to a change in the price of a good by substituting it with another good that is relatively cheaper.