Use the Following to Answer Questions

question 6

Multiple Choice

Use the following to answer questions :
Table 7-2
-If $40,000 worth of inventory were destroyed in an accident, what would the company in Table 7-2's new net worth be?

• A)$50,000
• B)$60,000
• C)$90,000
• D)$175,000
• E)None of the above.

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Definitions:

Limited Resources

The finite availability of resources such as time, money, and materials, which constrains production, consumption, and allocation decisions.

Consumer Sovereignty

The principle that the production and sale of goods and services in an economy are determined by the preferences and decisions of consumers.

Invisible Hand

A concept introduced by Adam Smith to describe how individuals’ self-interested actions can lead to positive social and economic outcomes for the community as a whole.

Self-Interest

An individual’s actions and decisions motivated by personal gain or benefit.