When There Is a Cost or Benefit That Affects Someone

question 321

Multiple Choice

When there is a cost or benefit that affects someone other than the seller and buyer,then there is

• A) a tax.
• B) a subsidy.
• C) a quantity regulation.
• D) a price regulation.
• E) an externality.

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Definitions:

Installment Plan

A payment method allowing a purchaser to pay for goods or services over a period of time in regular, fixed amounts.

Finance Company

A company that makes loans to individuals and/or businesses.

Breach of Agreement

The failure to fulfill the terms of a contract by one or more parties involved.

Faulty Goods

Products that are defective, damaged, or not functioning as intended when sold.