Use the Information Below to Answer the Following Question(s)

question 2

Multiple Choice

Use the information below to answer the following question(s) :
Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow:

-Assuming fixed costs remain unchanged, how would discontinuing the Fashion line affect operating income?

• A) Increase in total operating income of $29,000
• B) Increase in total operating income of $132,000
• C) Decrease in total operating income of $78,000
• D) Decrease in total operating income of $20,000

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Definitions:

Scarce Resources

Resources that are limited in availability and cannot sufficiently meet all the wants and needs of a society.

Markets

Platforms or systems where buyers and sellers interact to trade goods, services, or financial instruments.

Government Involvement

The participation or intervention by government bodies in the economy or specific industries.

Economic Activity

encompasses all actions involved in the production, distribution, and consumption of goods and services within an economy.