Question 1

For years Bayer aspirin advertised that it contained "the ingredient doctors recommend most." This is an example of

Accepted Answer

A)   ambiguity.
B)   psychological appeals.
C)   exaggeration.
D)   concealed facts.

Question 2

The doctrine of caveat emptor means that the law may be justifiably used to restrict the freedom of individuals for their own good.

Accepted Answer

A) True 
 B)False

Question 3

Economists can prove, if we grant them enough assumptions, that free-market buying and selling lead to optimal results. One of those assumptions is that everyone has full and complete information, on the basis of which they then buy and sell.

Accepted Answer

A) True 
 B)False

Question 4

Caveat emptor means

Accepted Answer

A)   strict product liability
B)   due care
C)   let the buyer beware
D)   the customer and manufacturer meet as equals

Question 5

Harvard business professor Theodore Levitt has

Accepted Answer

A)   drawn an analogy between advertising and art.
B)   proven the possibility of effective subliminal advertising.
C)   argued that the process of production today creates the very wants it then satisfies.
D)   invented the concept of "puffery".

Question 6

The FTC now follows the "modified" gullible consumer standard, and it protects consumers from ads that mislead significant numbers of people.

Accepted Answer

A) True 
 B)False

Question 7

Due care is

Accepted Answer

A)   based on the principle of caveat emptor.
B)   based on the principle "let the buyer beware."
C)   the idea that consumers and sellers do not meet as equals and that consumer's interests are particularly vulnerable to being harmed by the manufacturer.
D)   based on the principle of absolute liability.

Question 8

Before the case of MacPherson v. Buick Motor Car in 1916, injured consumers could only recover damages from the retailer of the defective product.

Accepted Answer

A) True 
 B)False

Question 9

Legal paternalism is the doctrine that the law should not be used to restrict the freedom of individuals for their own good.

Accepted Answer

A) True 
 B)False

Question 10

When advertisers conceal facts, they suppress information that is unfavorable to their products.

Accepted Answer

A) True 
 B)False

Question 11

The goal of advertising is

Accepted Answer

A)   to persuade people to purchase the product.
B)   to provide information about goods and services.
C)   to provide information about prices.
D)   to subsidize the media.

Question 12

Before the case of MacPherson v. Buick Motor Car in 1916, the law based a manufacturer's liability for injuries due to a defective product on

Accepted Answer

A)   the principle of strict liability.
B)   the direct contractual relationship between the producer and the consumer.
C)   the principle of the reasonable person.
D)   whether or not the manufacturer exercised due care.

Question 13

The consumer's main source of product information is

Accepted Answer

A)   testimonials of other customers.
B)   billboards.
C)   word of mouth.
D)   the label and package.

Question 14

Anti-paternalism is often defended on the assumption that individuals know their own interests better than anyone else, and that they are fully informed and able to advance those interests.

Accepted Answer

A) True 
 B)False

Question 15

Statistics indicate that the faith consumers place in manufacturers is often misplaced.

Accepted Answer

A) True 
 B)False

Question 16

Critics of advertising generally agree that

Accepted Answer

A)   advertising rarely gives consumers much useful information.
B)   brand loyalty increases price competition.
C)   restrictions on advertising violate the moral rights of advertisers.
D)   advertising can only influence us if we want it to.

Question 17

The FTC now follows the reasonable-person standard in matters of advertising, sales and marketing.

Accepted Answer

A) True 
 B)False

Question 18

Every year ___________ of Americans require medical treatment from product related accidents.

Accepted Answer

A)   tens of thousands
B)   hundreds
C)   millions
D)   hundreds of thousands

Question 19

Businesses are never legally responsible for accidents that occur exclusively as a result of product misuse.

Accepted Answer

A) True 
 B)False

Question 20

Subliminal advertising is advertising that supposedly communicates at a level beneath our conscious awareness.

Accepted Answer

A) True 
 B)False

Exam 6: Consumers

Before the case of MacPherson v. Buick Motor Car in 1916, injured consumers could only recover damages from the retailer of the defective product.

Correct AnswerverifiedShow Answer

Businesses are never legally responsible for accidents that occur exclusively as a result of product misuse.

Correct AnswerverifiedShow Answer

Harvard business professor Theodore Levitt has

Correct AnswerverifiedShow Answer

Critics of advertising generally agree that

Correct AnswerverifiedShow Answer

The FTC now follows the "modified" gullible consumer standard, and it protects consumers from ads that mislead significant numbers of people.

Correct AnswerverifiedShow Answer

Every year ___________ of Americans require medical treatment from product related accidents.

Correct AnswerverifiedShow Answer

Anti-paternalism is often defended on the assumption that individuals know their own interests better than anyone else, and that they are fully informed and able to advance those interests.

Correct AnswerverifiedShow Answer

Due care is

Correct AnswerverifiedShow Answer

Subliminal advertising is advertising that supposedly communicates at a level beneath our conscious awareness.

Correct AnswerverifiedShow Answer

The FTC now follows the reasonable-person standard in matters of advertising, sales and marketing.

Correct AnswerverifiedShow Answer

The goal of advertising is

Correct AnswerverifiedShow Answer

Statistics indicate that the faith consumers place in manufacturers is often misplaced.

Correct AnswerverifiedShow Answer

For years Bayer aspirin advertised that it contained "the ingredient doctors recommend most." This is an example of

Correct AnswerverifiedShow Answer

When advertisers conceal facts, they suppress information that is unfavorable to their products.

Correct AnswerverifiedShow Answer

Before the case of MacPherson v. Buick Motor Car in 1916, the law based a manufacturer's liability for injuries due to a defective product on

Correct AnswerverifiedShow Answer

The consumer's main source of product information is

Correct AnswerverifiedShow Answer

Economists can prove, if we grant them enough assumptions, that free-market buying and selling lead to optimal results. One of those assumptions is that everyone has full and complete information, on the basis of which they then buy and sell.

Correct AnswerverifiedShow Answer

Legal paternalism is the doctrine that the law should not be used to restrict the freedom of individuals for their own good.

Correct AnswerverifiedShow Answer

Caveat emptor means

Correct AnswerverifiedShow Answer

The doctrine of caveat emptor means that the law may be justifiably used to restrict the freedom of individuals for their own good.

Correct AnswerverifiedShow Answer

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