Consider a set of $n$ distinct objects. How many subsets does this set have?
The question can be answered in $2$ different ways.
Method 1
Subsets of the original set include the empty set, subsets with one and only one element, subsets with two and only two elements, ... , subsets with $n-1$ and only $n-1$ elements and subsets with $n$ and only $n$ elements.
The number of empty sets is $1= \binom{n}{0}$
The number of different subsets with $r$ and only $r$ element is $\binom{n}{r}$ (constructed by choosing which $r$ elements are in the subset) for each $r = 1,2, ... , n$
Summing up all the terms we get the total number of subsets $\sum_{r=0}^{n} \binom{n}{r}$
(The thing to note here is that none of the subset is counted twice within a term or among the terms of the finite sum)
Method 2
We use a choice function to construct all the different subsets. Assume the elements are numbered $1$ to $n$ (this can be done since the objects are distinct) Now to construct a subset out of these n objects, we should choose which objects to be included in the subset. So, for each object there is a choice of 'IN' or 'OUT' of the subset. Depending on whether the first object is 'IN' or 'OUT' we have a set of subsets, depending on whether the second object is 'IN' or 'OUT' we have a set of subsets, and so on. But observe that the choice 'IN' or 'OUT' of the $r^{th}$ object does not depend on the choices made for the other $n-1$ objects.
Therefor by the multiplication principle there are $2 \times 2 \times ... \times 2 $ ($n$ $2$'s) $=2^n$ subsets.
Method 1 and 2 should yield the same answer. Hence the result follows.