When a Person Enters into a Contract with the Intent

question 50

Multiple Choice

When a person enters into a contract with the intent to confer a benefit or gift to an intended third party,the contract is called a ________ contract.

• A) Good Samaritan
• B) Solomonic
• C) donee beneficiary
• D) residual
• E) declaratory

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Definitions:

Long-Run Equilibrium

A state in which all factors of production can be adjusted, markets clear, and no economic agents have the incentive to change their behavior.

Marginal Revenue

The additional income that a business receives from selling one more unit of a good or service.

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs.

Short-Run Equilibrium

A state in which market supply and demand balance out at current prices, leading to an economic situation where no incentive exists for prices to change.