Question

mikah invented and patented a new product which sells in local department stores. this is an example of ______ income.
a. capital gains
b. earned
c. hourly
d. passive

please select the best answer from the choices provided

a
b
c
d

Explanation:

🆕 New Concept Discovered: Types of Income
Money earned with little to no ongoing active effort.

Step 1: Analyze the scenario

Mikah invented and patented a product. Once a patent is established and the product is sold in stores, the inventor typically receives royalties or licensing fees from those sales. This means Mikah continues to earn money from the invention without having to actively work daily to produce or sell each individual unit.

Step 2: Evaluate the options

• a. capital gains: Profit from selling an asset (like stocks or real estate) for more than its purchase price.
• b. earned: Income from active work, such as a salary, wages, or tips.
• c. hourly: A specific type of earned income based on the number of hours worked.
• d. passive: Income generated from enterprise in which an individual is not actively involved on a day-to-day basis, such as royalties from patents or creative works.

Since patent royalties are a classic example of passive income, option d is the correct choice.

Answer:

D