Question 1

Defenders of advertising claim that, despite criticisms, advertising enjoys protection under the first Amendment as a form of speech.

Accepted Answer

A) True 
 B)False

Question 2

The Federal Trade Commission (FTC) was established in 1914 to protect consumers against deceptive advertising.

Accepted Answer

A) True 
 B)False

Question 3

Business's responsibility for understanding and providing for consumer needs derives from the fact that citizen-consumers are dependent on business to satisfy their needs.

Accepted Answer

A) True 
 B)False  True

Question 4

The case of FTC v. Standard Education was important in the legal transition

Accepted Answer

A)   toward the principle of caveat emptor.
B)   toward something like the ignorant consumer standard.
C)   toward the reasonable-person standard.
D)   that removed power from the Federal Trade Commission (FT
C)  .

Question 5

According to the legal doctrine of strict product liability,

Accepted Answer

A)   the producer of a product is responsible for any injury the consumer suffers.
B)   consumers must assume all risk whenever they buy a product.
C)   product liability presupposes negligence by more than one party.
D)   a manufacturer need not be negligent to be held liable for a defective product.

Question 6

A psychological appeal is one that aims to persuade by appealing primarily to reason and not to human emotional needs.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is an example of price gouging?

Accepted Answer

A)   Selling World Series Tickets for $300.
B)   New York hotels that doubled or tripled their prices in the aftermath of the September 11, 2001, attacks.
C)   Having to pay above the seller's original asking price for a home.
D)   Increasing the price of lawn movers in the spring and summer.

Question 8

Strict product liability is the doctrine that the seller of a product has legal responsibilities to compensate the user of that product for injuries suffered due to a defective aspect of the product, even if the seller has not been negligent in permitting that defect to exist.

Accepted Answer

A) True 
 B)False

Question 9

In 1972 Congress created one of the most important agencies for regulating product safety. This agency is the

Accepted Answer

A)   Securities and Exchange Commission.
B)   Federal Drug Administration Agency.
C)   Fair Packaging and Labeling Commission.
D)   Consumer Product Safety Commission. D

Question 10

Deceptive advertising is always legal because we have freedom of speech.

Accepted Answer

A) True 
 B)False

Question 11

The controversy over legal paternalism pits the values of individual freedom and autonomy against social welfare.

Accepted Answer

A) True 
 B)False

Question 12

One decisive case in the legal transition away from the reasonable-person standard in matters of advertising, sales and marketing was FTC v. Standard Education.

Accepted Answer

A) True 
 B)False

Question 13

Which statement is true from an ethical perspective?

Accepted Answer

A)   The argument for strict liability is basically utilitarian.
B)   Strict liability is identical with absolute liability.
C)   The concept of due care is identical with that of caveat emptor.
D)   The argument for due care is basically Kantian.

Question 14

Terms like "can be," "as much as," and "help," are examples of

Accepted Answer

A)   concealment of facts.
B)   truth in advertising.
C)   ambiguity.
D)   consumer confidence.

Question 15

The case of MacPherson v. Buick Motor Car in 1916 changed product liability law. As a result of it, the courts

Accepted Answer

A)   permitted consumers to sue manufacturers with whom they had no contractual relationships.
B)   adopted the principle of caveat emptor.
C)   permitted consumers to sue the retailer from whom they had purchased the product.
D)   adopted the principle of strict liability.

Question 16

Which statement is accurate in its description of consumer protection?

Accepted Answer

A)   The Consumer Product Safety Commission has the power to order recalls.
B)   Statistics show that, in fact, safety regulations rarely succeed in increasing safety.
C)   Critics agree that the cost of safety regulations and product recalls are negligible.
D)   Safety regulations permit people to choose to save money by purchasing riskier (but less expensive)  products.

Question 17

"Weasel words" are words used to evade or retreat from a direct or forthright statement.

Accepted Answer

A) True 
 B)False

Question 18

Due care is the idea that consumers and sellers do not meet as equals and that the consumer's interests are particularly vulnerable to being harmed by the manufacturer, who has knowledge and expertise the consumer does not have.

Accepted Answer

A) True 
 B)False

Question 19

The terms "best, finest, and most" are examples of

Accepted Answer

A)   puffery.
B)   psychological appeals.
C)   truth in advertising.
D)   trust building statements. A

Question 20

Advertising

Accepted Answer

A)   makes the market more efficient.
B)   maximizes consumer well-being (thanks to the invisible hand) .
C)   can't be restricted without violating the moral rights of advertisers.
D)   subsidizes the media.

Exam 6: Consumers

Defenders of advertising claim that, despite criticisms, advertising enjoys protection under the first Amendment as a form of speech.

Correct AnswerverifiedShow Answer

The Federal Trade Commission (FTC) was established in 1914 to protect consumers against deceptive advertising.

Correct AnswerverifiedShow Answer

Business's responsibility for understanding and providing for consumer needs derives from the fact that citizen-consumers are dependent on business to satisfy their needs.

Correct AnswerverifiedTrue

The case of FTC v. Standard Education was important in the legal transition

Correct AnswerverifiedShow Answer

According to the legal doctrine of strict product liability,

Correct AnswerverifiedShow Answer

A psychological appeal is one that aims to persuade by appealing primarily to reason and not to human emotional needs.

Correct AnswerverifiedShow Answer

Which of the following is an example of price gouging?

Correct AnswerverifiedShow Answer

Strict product liability is the doctrine that the seller of a product has legal responsibilities to compensate the user of that product for injuries suffered due to a defective aspect of the product, even if the seller has not been negligent in permitting that defect to exist.

Correct AnswerverifiedShow Answer

In 1972 Congress created one of the most important agencies for regulating product safety. This agency is the

Correct AnswerverifiedD

Deceptive advertising is always legal because we have freedom of speech.

Correct AnswerverifiedShow Answer

The controversy over legal paternalism pits the values of individual freedom and autonomy against social welfare.

Correct AnswerverifiedShow Answer

One decisive case in the legal transition away from the reasonable-person standard in matters of advertising, sales and marketing was FTC v. Standard Education.

Correct AnswerverifiedShow Answer

Which statement is true from an ethical perspective?

Correct AnswerverifiedShow Answer

Terms like "can be," "as much as," and "help," are examples of

Correct AnswerverifiedShow Answer

The case of MacPherson v. Buick Motor Car in 1916 changed product liability law. As a result of it, the courts

Correct AnswerverifiedShow Answer

Which statement is accurate in its description of consumer protection?

Correct AnswerverifiedShow Answer

"Weasel words" are words used to evade or retreat from a direct or forthright statement.

Correct AnswerverifiedShow Answer

Due care is the idea that consumers and sellers do not meet as equals and that the consumer's interests are particularly vulnerable to being harmed by the manufacturer, who has knowledge and expertise the consumer does not have.

Correct AnswerverifiedShow Answer

The terms "best, finest, and most" are examples of

Correct AnswerverifiedA

Advertising

Correct AnswerverifiedShow Answer

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True

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D

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A

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