Clarification on alternative combinatorial reasoning

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Consider the equation $${n\choose0}+{n\choose1}+{n\choose2}+\cdots+{n\choose n}=2^n.$$

By definition, every term in this equation represents a count of subsets:

  • $n \choose k$ represents the number of $k$-element subsets of an $n$-element set.
  • $2^n$ represents the total number of subsets of an $n$-element set.

I realize that, at this point, the fact that the equation holds for any $n\ge0$ is self-evident (as we are counting the same thing in two different ways). I was wondering if the following (admittedly clunky) line of thought was also valid:

If we were to replace the counts of the subsets with the subsets themselves (treating the addition as a disjoint union), we would end up with a set of all subsets of an $n$-element set on both sides.

The idea of a "set of sets" is new to me, and having it appear in this supposedly simple line of thought brings some doubts to my mind. Is the reasoning valid?

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Yes, it's fine. There's a set of all subsets of a given set, and it decomposes as a disjoint union of the sets of subsets of each possible size. This gives what is called a bijective proof of the original identity; for much more on this see Art Benjamin's Proofs that Really Count.