Such a Provision Within the Credit Card Contract Is

question 10

Multiple Choice

Such a provision within the credit card contract is:

• A) unconscionable.
• B) an illegal contract of adhesion.
• C) not binding, as a person cannot waive the statutory rights granted to him by federal credit card legislation.
• D) valid unless state legislation prohibits such clauses.

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Definitions:

Negative Externalities

Costs suffered by a third party as a result of an economic transaction, which are not reflected in the transaction's price.

Taxed

The act of imposing financial charges on individuals or entities by a governmental organization in order to fund public spending.

Coase Theorem

A principle that suggests that if property rights are well-defined and transaction costs are negligible, parties will negotiate to correct externalities without the need for government intervention.

Externality Problems

Issues arising when the actions of individuals or firms have effects on third parties that are not reflected in market prices.