Question 1

Federal law regulates the use of such terms as low fat on food labels.

Accepted Answer

A) True 
 B)False

Question 2

Under the Fair Credit Reporting Act, a consumer can request the identity of anyone who has received a credit agency's report on the consumer.

Accepted Answer

A) True 
 B)False

Question 3

Pro Motor Company makes cars. Federal law requires Pro to attach a label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to

Accepted Answer

A)  every new car.
B)  no car-compliance with the law is voluntary.
C)  select old and new cars.
D)  every car.E) C) and D)
F) None of the above

Question 4

Whole Grains Company wants to make and market new processed bread and cereal products. On each product's label, standard nutrition facts are

Accepted Answer

A)  prohibited.
B)  required.
C)  voluntary.
D)  discretionary.E) All of the above
F) B) and C)

Question 5

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances. This transaction is subject to

Accepted Answer

A)  no federal law.
B)  the Fair Credit Reporting Act.
C)  the Telecommunications Act.
D)  the Truth-in-Lending Act.E) A) and B)
F) C) and D)

Question 6

An obviously exaggerated advertising claim will be considered deceptive even if a reasonable consumer would not believe it to be true.

Accepted Answer

A) True 
 B)False

Question 7

The Telemarketing Sales Rule applies to any offer-domestic or foreign-made to consumers in the United States.

Accepted Answer

A) True 
 B)False

Question 8

With respect to tainted foods, the focus of federal regulators has shifted from responding to incidents of contamination to preventing them.

Accepted Answer

A) True 
 B)False

Question 9

A debt-collection agency can always contact a debtor at his or her place of employment.

Accepted Answer

A) True 
 B)False

Question 10

Advertising will be deemed deceptive if it includes a claim that omits a material fact about a product.

Accepted Answer

A) True 
 B)False

Question 11

The Federal Trade Commission (FTC) receives numerous complaints that a Renewal Subscriptions Inc. ad is deceptive. The FTC's first step is to

Accepted Answer

A)  draft a formal complaint.
B)  investigate.
C)  issue a cease-and-desist order.
D)  refer the complaints to the U.S. Department of Justice.E) A) and B)
F) A) and C)

Question 12

Hearth & Home Furniture store advertises bedroom suites at a "Special Low Price of $599." When Ilene tries to buy one of the suites, Jill, the salesperson, tells her that they are all sold and no more are obtainable. Jill adds that Hearth & Home has other bedroom suites available for as low as $2,599. This is

Accepted Answer

A)  a cease-and-desist order.
B)  bait-and-switch advertising.
C)  counteradvertising.
D)  puffery.E) A) and C)
F) All of the above

Question 13

The Federal Commerce Commission is charged with the goal of preventing unfair and deceptive trade practices.

Accepted Answer

A) True 
 B)False

Question 14

Rollo has a credit card from Shopping Cards Inc. To change the terms, Shopping Cards must

Accepted Answer

A)  impose double-cycle billing.
B)  give Rollo advance notice.
C)  send monthly bills twenty-one days before the change.
D)  increase the interest rate only retroactively.E) B) and D)
F) None of the above

Question 15

Labels must be accurate and use words easily understood by the ordinary consumer.

Accepted Answer

A) True 
 B)False

Question 16

Deceptive advertising occurs if a reasonable consumer believes an advertising claim.

Accepted Answer

A) True 
 B)False

Question 17

Value Loan Company extends credit to consumers. Value Loan applies a variety of requirements to determine applicants' qualifications for credit, the amount, the interest rate, and other terms. Under the Equal Credit Opportunity Act, the lender cannot base its credit decisions on an applicant's

Accepted Answer

A)  credibility.
B)  financial awareness.
C)  occupation.
D)  gender.E) A) and B)
F) C) and D)

Question 18

Consumer Staples Inc. includes in its advertising obvious exaggerations, vague generalities, and puffery about its products. The firm may be subject to sanctions for

Accepted Answer

A)  obvious exaggerations.
B)  vague generalities.
C)  puffery.
D)  none of the choices.E) A) and B)
F) C) and D)

Question 19

Faux Products Inc., in its ads, makes false claims about its own products and about the products of its competitors. The firm may be subject to sanctions for the false claims about

Accepted Answer

A)  its products only.
B)  its competitors' products only.
C)  its products and its competitors' products.
D)  none of the choices.E) A) and D)
F) B) and C)

Question 20

Lawnscape Company and Mowers Inc. make yard tools. Both companies use only steel produced in the United States. Lawnscape's ad claims, "We use only U.S. steel, while our competitor uses inferior foreign steel!" Under the advertising standards of the Federal Trade Commission Act, this statement is most likely

Accepted Answer

A)  an obvious exaggeration.
B)  puffery.
C)  a false claim about a competitor's product.
D)  a half-truth.E) A) and B)
F) B) and D)

Exam 41: Consumer Law

Consumer Staples Inc. includes in its advertising obvious exaggerations, vague generalities, and puffery about its products. The firm may be subject to sanctions for

Correct Answer
verified

Correct Answer
verified

The Federal Trade Commission (FTC) receives numerous complaints that a Renewal Subscriptions Inc. ad is deceptive. The FTC's first step is to

Correct Answer
verified

A debt-collection agency can always contact a debtor at his or her place of employment.

Correct Answer
verified

Labels must be accurate and use words easily understood by the ordinary consumer.

Correct Answer
verified

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances. This transaction is subject to

Correct Answer
verified

With respect to tainted foods, the focus of federal regulators has shifted from responding to incidents of contamination to preventing them.

Correct Answer
verified

Rollo has a credit card from Shopping Cards Inc. To change the terms, Shopping Cards must

Correct Answer
verified

Value Loan Company extends credit to consumers. Value Loan applies a variety of requirements to determine applicants' qualifications for credit, the amount, the interest rate, and other terms. Under the Equal Credit Opportunity Act, the lender cannot base its credit decisions on an applicant's

Correct Answer
verified

Under the Fair Credit Reporting Act, a consumer can request the identity of anyone who has received a credit agency's report on the consumer.

Correct Answer
verified

The Federal Commerce Commission is charged with the goal of preventing unfair and deceptive trade practices.

Correct Answer
verified

Deceptive advertising occurs if a reasonable consumer believes an advertising claim.

Correct Answer
verified

Pro Motor Company makes cars. Federal law requires Pro to attach a label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to

Correct Answer
verified

Federal law regulates the use of such terms as low fat on food labels.

Correct Answer
verified

An obviously exaggerated advertising claim will be considered deceptive even if a reasonable consumer would not believe it to be true.

Correct Answer
verified

Correct Answer
verified

Faux Products Inc., in its ads, makes false claims about its own products and about the products of its competitors. The firm may be subject to sanctions for the false claims about

Correct Answer
verified

The Telemarketing Sales Rule applies to any offer-domestic or foreign-made to consumers in the United States.

Correct Answer
verified

Whole Grains Company wants to make and market new processed bread and cereal products. On each product's label, standard nutrition facts are

Correct Answer
verified

Advertising will be deemed deceptive if it includes a claim that omits a material fact about a product.

Correct Answer
verified

Exam 41: Consumer Law

Consumer Staples Inc. includes in its advertising obvious exaggerations, vague generalities, and puffery about its products. The firm may be subject to sanctions for

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Federal Trade Commission (FTC) receives numerous complaints that a Renewal Subscriptions Inc. ad is deceptive. The FTC's first step is to

Correct AnswerverifiedShow Answer

A debt-collection agency can always contact a debtor at his or her place of employment.

Correct AnswerverifiedShow Answer

Labels must be accurate and use words easily understood by the ordinary consumer.

Correct AnswerverifiedShow Answer

Greg signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances. This transaction is subject to

Correct AnswerverifiedShow Answer

With respect to tainted foods, the focus of federal regulators has shifted from responding to incidents of contamination to preventing them.

Correct AnswerverifiedShow Answer

Rollo has a credit card from Shopping Cards Inc. To change the terms, Shopping Cards must

Correct AnswerverifiedShow Answer

Value Loan Company extends credit to consumers. Value Loan applies a variety of requirements to determine applicants' qualifications for credit, the amount, the interest rate, and other terms. Under the Equal Credit Opportunity Act, the lender cannot base its credit decisions on an applicant's

Correct AnswerverifiedShow Answer

Under the Fair Credit Reporting Act, a consumer can request the identity of anyone who has received a credit agency's report on the consumer.

Correct AnswerverifiedShow Answer

The Federal Commerce Commission is charged with the goal of preventing unfair and deceptive trade practices.

Correct AnswerverifiedShow Answer

Deceptive advertising occurs if a reasonable consumer believes an advertising claim.

Correct AnswerverifiedShow Answer

Pro Motor Company makes cars. Federal law requires Pro to attach a label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to

Correct AnswerverifiedShow Answer

Federal law regulates the use of such terms as low fat on food labels.

Correct AnswerverifiedShow Answer

An obviously exaggerated advertising claim will be considered deceptive even if a reasonable consumer would not believe it to be true.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Faux Products Inc., in its ads, makes false claims about its own products and about the products of its competitors. The firm may be subject to sanctions for the false claims about

Correct AnswerverifiedShow Answer

The Telemarketing Sales Rule applies to any offer-domestic or foreign-made to consumers in the United States.

Correct AnswerverifiedShow Answer

Whole Grains Company wants to make and market new processed bread and cereal products. On each product's label, standard nutrition facts are

Correct AnswerverifiedShow Answer

Advertising will be deemed deceptive if it includes a claim that omits a material fact about a product.

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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