The answer is C: teal square.

The rule
The pattern repeats every 2 things: yellow square, teal square. Then it starts again from the beginning.
The pattern as Python code
Here is a tiny Python program that follows the same rule. Type it into IDLE and run it to print the whole pattern, including the answer.
pattern = ["yellow square", "teal square"]
for position in range(8):
print(position + 1, pattern[position % len(pattern)])
When you run it, Python prints:
1 yellow square 2 teal square 3 yellow square 4 teal square 5 yellow square 6 teal square 7 yellow square 8 teal square
Pixel says: Try changing a number in the code and run it again. Can you make the pattern go on for 20 steps? Meow!