Question 1

Which of the following is the term used when an advertisement is true but incomplete?

Accepted Answer

A)   Inaccurate truth
B)   Rule 8(a)  violation
C)   Rule 3 violation
D)   Significant untruth
E)   Half-truthF) A) and C)
G) B) and E)

Question 2

Which of the following was the ruling by a majority of the U.S. Supreme Court in Food and Drug Administration Et Al. v. Brown & Williamson Tobacco Corporation Et Al., the case in the text involving whether the Food and Drug Administration has jurisdiction to regulate tobacco products?

Accepted Answer

A)   That the Food and Drug Administration has jurisdiction over tobacco products.
B)   That the Food and Drug Administration has jurisdiction over tobacco products only to the extent that any advertisement may be directed to children.
C)   That the Food and Drug Administration has jurisdiction over tobacco products only to the extent that it may regulate warnings on packages of tobacco products.
D)   That the Food and Drug Administration does not have jurisdiction over tobacco products.
E)   That the Food and Drug Administration does not have jurisdiction over tobacco products unless deceptive advertising is involved.F) A) and D)
G) A) and C)

Question 3

Which of the following is required by the Federal Trade Commission Cooling-Off Rule in regard to door-to-door sales?

Accepted Answer

A)   That consumers have three days in which to cancel purchases made from salespeople who come to their homes.
B)   That the salesperson notify the consumer, both verbally and in writing that the sales transaction may be cancelled.
C)   That the consumer be notified in writing in the same language in which the oral negotiations were conducted.
D)   That consumers have three days in which to cancel purchases made from salespeople who come to their homes; that the salesperson notify the consumer, both verbally and in writing that the sales transaction may be cancelled; and that the consumer be notified in writing in the same language in which the oral negotiations were conducted.
E)   That consumers have three days in which to cancel purchases made from salespeople who come to their homes and that the salesperson notify the consumer in writing in the same language in which oral negotiations were conducted that the transaction may be cancelled, but not that notification also be made verbally.F) All of the above
G) A) and E)

Question 4

State laws in regard to protection of purchasers of used-cars are preempted by federal law.

Accepted Answer

A) True 
 B)False  False

Question 5

Which of the following does the Federal Trade Commission require if a company wishes to claim that its products are "Made in the U.S.A."?

Accepted Answer

A)   That the claim not be used unless all, or virtually all, of the product's components and labor are of U.S. origin.
B)   That the claim not be used unless absolutely all of the components and labor of the product are of U.S. origin.
C)   That the claim not be used unless at least 75% of the product's components and labor are of U.S. origin.
D)   That the claim not be used unless at least 50% of the product's components and labor are of U.S. origin.
E)   That the claim not be used unless at least 55% of the product's labor and components are from Canada, Mexico, or the United States.F) A) and E)
G) C) and D)

Question 6

Which of the following are prohibited by the Fair Debt Collection Practices Act?

Accepted Answer

A)   Contacting a debtor at work if the debtor's employer objects.
B)   Misrepresenting the collection agency as a lawyer or police officer.
C)   Contacting a debtor who has notified the collection agency that he or she wants no contact with the agency.
D)   Contacting a debtor at work if the debtor's employer objects, misrepresenting the collection agency as a lawyer or police officer, and contacting a debtor who has notified the collection agency that he or she wants no contact with the agency.
E)   Contacting a debtor at work if the debtor's employer objects, and misrepresenting the collection agency as a lawyer or police officer are prohibited; but contacting a debtor who has notified the collection agency that he or she wants no contact with the agency is not prohibited.F) B) and E)
G) A) and B)

Question 7

Reference - Convertibles. Barry, a new car dealer, advertised that a new brand of convertible called Wind would be available at his dealership for the price of $10,000 each. He had only three Wind vehicles, however; and when those were sold, he tried to convince shoppers to purchase a much more expensive new convertible at a price of $25,000. Kathy, a customer who decided to purchase one of the more expensive vehicles needed financing in order to do so. She had $10,000 to pay on the car and sought a loan from ABC Bank for the remainder. She wanted the loan for a specific amount of time. ABC Bank offered her the loan and she agreed. The only information she received from ABC Bank was confirmation that she borrowed $15,000 at an 8% interest rate. After receiving several complaints, the Federal Trade Commission disapproved of Barry's action in regard to the Wind vehicles. Claiming that his advertisement was misleading, the Commission proceeded to issue a cease-and-desist order prohibiting deceptive advertising involving Wind vehicles and also in regard to any other vehicles Barry offered for sale. Which of the following terms references the cease-and-desist order entered by the Federal Trade Commission involving not only Barry's sales of Wind, but also his sales of all other vehicles?

Accepted Answer

A)   A multiple cease-and-desist order
B)   A multiple-product order
C)   A combined order
D)   A superlative order
E)   An exceptional orderF) A) and D)
G) C) and D)

Question 8

What three key guidelines regarding mail-order sales were established by the Mail or Telephone Order Merchandise Rule of 1993 which amended the 1975 Mail-Order Rule?

Accepted Answer

First, sellers must ship items within th...

Question 9

Reference - The Burial Emporium. Fred operates a funeral home called Fred's Burial Emporium. Fred likes to keep things simple. He has one flat price with no itemization and requires that customers purchase a complete package from him if they want any services whatsoever. Fred also goes door-to-door selling funeral packages. He tries to visit neighborhoods in which there has been a recent death because residents in the neighborhood will have final arrangements on their minds. He believes and informs customers that once customers sign a contract for burial services, there is no backing out. Fred also obtains a good deal of business from phone solicitation. He enjoys calling late at night, between 10 p.m. and 11 p.m., when people are tired, but before they go to bed. He believes that if people do not feel well, they are more likely to consider funeral arrangements. After some pesky consumer complaints, the Federal Trade Commission and other federal agencies investigate Fred. He hires a good lawyer with his profits in an attempt to stay out of trouble. Which of the following is true regarding Fred's practice of requiring a complete package purchase from him if the consumer desires any funeral services?

Accepted Answer

A)   There is no problem with that practice under federal law.
B)   There is no problem with that practice under federal law so long as Fred informs customers of that prior to entering into any sales talk and negotiation.
C)   That practice is prohibited by federal law.
D)   That practice is prohibited by federal law unless Fred gives a 10% discount as compared to the average price of funeral services in his state.
E)   That practice is prohibited by federal law unless Fred gives a 20% discount as compared to the average price of funeral services in his state.F) C) and D)
G) C) and E) C

Question 10

Which of the following is false regarding the Telephone Consumer Protection Act of 1991?

Accepted Answer

A)   It forbids telephone solicitation using an automatic telephone dialing system.
B)   It forbids telephone solicitation using a prerecorded voice.
C)   It makes it illegal to transmit advertisements via fax unless the recipient agrees to the fax transmission.
D)   Only the Federal Communications Commission can take action to enforce the act.
E)   If a telemarketer willfully violates the act, the court can decide to triple the amount owed to the consumer.F) A) and E)
G) A) and D)

Question 11

Which of the following conducts investigations into the safety of motor vehicles?

Accepted Answer

A)   The Vehicle Investigation Commission
B)   The Vehicle Safety Administration
C)   The National Highway Traffic Safety Administration
D)   The Motorized Safety Administration
E)   The Transportation Safety CommissionF) A) and C)
G) B) and C)

Question 12

Which of the following was the first federal legislation regulating food and drugs?

Accepted Answer

A)   The Applied Food, Drug, and Cosmetic Act
B)   The Pure Food and Drugs Act
C)   The Food and Drug Safety Act
D)   The Consumer Safety Act
E)   The Congressional Safety ActF) A) and D)
G) A) and C)

Question 13

Mona markets a bell that she claims will automatically quiet a crying baby. Mona advertises on television that the bell has a certain tone that babies love and shows a baby suddenly stop crying when the bell is rung. She charges $50 for each bell for which she incurs $1 in manufacturing charges. The bell was very popular for a few months, but she has started to get complaints; and the Federal Trade Commission has investigated her advertisement regarding the bell. Mona claims that her advertisement is not deceptive. The Federal Trade Commission, however, claims that her advertisement satisfies the three elements necessary for a deceptive claim. What are those three elements?

Accepted Answer

The three elements of deceptive claims are (1) a material misrepresentation, omission or practice that is (2) likely to mislead a (3) reasonable consumer.

Question 14

Which of the following is not a federal law referenced in the text regulating product labeling?

Accepted Answer

A)   The Wool Products Labeling Act
B)   The Fur Products Labeling Act
C)   The Flammable Fabrics Act
D)   The Nutrition Labeling and Education Act
E)   The Imported Canine and Feline Fur ActF) A) and C)
G) C) and D)

Question 15

Which of the following is true regarding the obligation, if any, of a consumer who discovers that a company has sent the consumer unsolicited merchandise?

Accepted Answer

A)   The consumer may treat the merchandise as a gift.
B)   The consumer may only treat the merchandise as a gift if it has a value of under $25; otherwise, the consumer must call the seller and ask if the seller would like to cover return postage.
C)   The consumer may only treat the merchandise as a gift if it has a value of under $50; otherwise, the consumer must call the seller and ask if the seller would like to cover return postage.
D)   The consumer may only treat the merchandise as a gift if it has a value of under $100; otherwise, the consumer must call the seller and ask if the seller would like to cover return postage.
E)   The consumer must return the merchandise.F) D) and E)
G) C) and E)

Question 16

The Federal Trade Commission has ____________ commissioners each of whom serves a _____________-year term.

Accepted Answer

A)   5; 7
B)   7; 3
C)   9; 4
D)   8; 5
E)   3; 4F) D) and E)
G) None of the above

Question 17

How can the Federal Trade Commission protect consumers if most companies within one industry are using the same unfair or deceptive practices?

Accepted Answer

When most companies within one industry ...

Question 18

Reference - Miracle Pill. Katie advertised that she had developed a pill for women that would result in weight loss, wrinkle loss, and improved vitality; and for men would result in all those things, plus hair growth. Her television advertisement showed miracle results allegedly obtained by consumers. Katie cautioned, however, that ingestion of the pill for six months was required before results would be evident. The pill was wildly popular. The Federal Trade Commission, however, investigated and determined that Katie had failed to have a reasonable basis for the claims she made in advertisements. Katie claimed that she was merely involved in the use of generalities and clear exaggerations. The Commission disagreed and issued a formal administrative complaint against her. After a hearing, an order was issued by the Federal Trade Commission requiring that Katie stop advertising and selling the pills. After losing all appeals, Katie continued selling the pills until she was fined by the Federal Trade Commission. She has since left the country and cannot be located. Who would have presided over the hearing involving the administrative complaint filed against Katie by the Federal Trade Commission?

Accepted Answer

A)   A state circuit court judge
B)   A federal district court judge
C)   An administrative law judge
D)   A panel of commissioners of the Federal Trade Commission
E)   All the commissioners of the Federal Trade CommissionF) A) and B)
G) A) and C)

Question 19

Reference - Miracle Pill. Katie advertised that she had developed a pill for women that would result in weight loss, wrinkle loss, and improved vitality; and for men would result in all those things, plus hair growth. Her television advertisement showed miracle results allegedly obtained by consumers. Katie cautioned, however, that ingestion of the pill for six months was required before results would be evident. The pill was wildly popular. The Federal Trade Commission, however, investigated and determined that Katie had failed to have a reasonable basis for the claims she made in advertisements. Katie claimed that she was merely involved in the use of generalities and clear exaggerations. The Commission disagreed and issued a formal administrative complaint against her. After a hearing, an order was issued by the Federal Trade Commission requiring that Katie stop advertising and selling the pills. After losing all appeals, Katie continued selling the pills until she was fined by the Federal Trade Commission. She has since left the country and cannot be located. If a company violates a cease-and-desist order issued by the Federal Trade Commission and upheld by the courts, which of the following is the fine that the Federal Trade Commission may impose?

Accepted Answer

A)   Up to $3,000 per violation
B)   Up to $5,000 per violation
C)   Up to $10,000 per violation
D)   Up to $50,000 per violation
E)   Up to $100,000 per violationF) A) and B)
G) D) and E)

Question 20

Set forth the rights of appeal a company has if issued a cease-and-desist order by the Federal Trade Commission.

Accepted Answer

The company may appeal the decision to t...

Exam 25: Consumer Law

Which of the following is the term used when an advertisement is true but incomplete?

Correct Answer
verified

Which of the following was the ruling by a majority of the U.S. Supreme Court in Food and Drug Administration Et Al. v. Brown & Williamson Tobacco Corporation Et Al., the case in the text involving whether the Food and Drug Administration has jurisdiction to regulate tobacco products?

Correct Answer
verified

Which of the following is required by the Federal Trade Commission Cooling-Off Rule in regard to door-to-door sales?

Correct Answer
verified

State laws in regard to protection of purchasers of used-cars are preempted by federal law.

Correct Answer
verified
False

Which of the following does the Federal Trade Commission require if a company wishes to claim that its products are "Made in the U.S.A."?

Correct Answer
verified

Which of the following are prohibited by the Fair Debt Collection Practices Act?

Correct Answer
verified

Correct Answer
verified

What three key guidelines regarding mail-order sales were established by the Mail or Telephone Order Merchandise Rule of 1993 which amended the 1975 Mail-Order Rule?

Correct Answer
verified
First, sellers must ship items within th...
View Answer

Correct Answer
verified
C

Which of the following is false regarding the Telephone Consumer Protection Act of 1991?

Correct Answer
verified

Which of the following conducts investigations into the safety of motor vehicles?

Correct Answer
verified

Which of the following was the first federal legislation regulating food and drugs?

Correct Answer
verified

Correct Answer
verified
The three elements of deceptive claims are (1) a material misrepresentation, omission or practice that is (2) likely to mislead a (3) reasonable consumer.

Which of the following is not a federal law referenced in the text regulating product labeling?

Correct Answer
verified

Which of the following is true regarding the obligation, if any, of a consumer who discovers that a company has sent the consumer unsolicited merchandise?

Correct Answer
verified

The Federal Trade Commission has commissioners each of whom serves a _-year term.

Correct Answer
verified

How can the Federal Trade Commission protect consumers if most companies within one industry are using the same unfair or deceptive practices?

Correct Answer
verified
When most companies within one industry ...
View Answer

Correct Answer
verified

Correct Answer
verified

Set forth the rights of appeal a company has if issued a cease-and-desist order by the Federal Trade Commission.

Correct Answer
verified
The company may appeal the decision to t...
View Answer

Exam 25: Consumer Law

Which of the following is the term used when an advertisement is true but incomplete?

Correct AnswerverifiedShow Answer

Which of the following was the ruling by a majority of the U.S. Supreme Court in Food and Drug Administration Et Al. v. Brown & Williamson Tobacco Corporation Et Al., the case in the text involving whether the Food and Drug Administration has jurisdiction to regulate tobacco products?

Correct AnswerverifiedShow Answer

Which of the following is required by the Federal Trade Commission Cooling-Off Rule in regard to door-to-door sales?

Correct AnswerverifiedShow Answer

State laws in regard to protection of purchasers of used-cars are preempted by federal law.

Correct AnswerverifiedFalse

Which of the following does the Federal Trade Commission require if a company wishes to claim that its products are "Made in the U.S.A."?

Correct AnswerverifiedShow Answer

Which of the following are prohibited by the Fair Debt Collection Practices Act?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What three key guidelines regarding mail-order sales were established by the Mail or Telephone Order Merchandise Rule of 1993 which amended the 1975 Mail-Order Rule?

Correct AnswerverifiedFirst, sellers must ship items within th...View AnswerShow Answer

Correct AnswerverifiedC

Which of the following is false regarding the Telephone Consumer Protection Act of 1991?

Correct AnswerverifiedShow Answer

Which of the following conducts investigations into the safety of motor vehicles?

Correct AnswerverifiedShow Answer

Which of the following was the first federal legislation regulating food and drugs?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe three elements of deceptive claims are (1) a material misrepresentation, omission or practice that is (2) likely to mislead a (3) reasonable consumer.

Which of the following is not a federal law referenced in the text regulating product labeling?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the obligation, if any, of a consumer who discovers that a company has sent the consumer unsolicited merchandise?

Correct AnswerverifiedShow Answer

The Federal Trade Commission has ____________ commissioners each of whom serves a _____________-year term.

Correct AnswerverifiedShow Answer

How can the Federal Trade Commission protect consumers if most companies within one industry are using the same unfair or deceptive practices?

Correct AnswerverifiedWhen most companies within one industry ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Set forth the rights of appeal a company has if issued a cease-and-desist order by the Federal Trade Commission.

Correct AnswerverifiedThe company may appeal the decision to t...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
False

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
First, sellers must ship items within th...
View Answer

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The three elements of deceptive claims are (1) a material misrepresentation, omission or practice that is (2) likely to mislead a (3) reasonable consumer.

Correct Answer
verified

Correct Answer
verified

The Federal Trade Commission has commissioners each of whom serves a _-year term.

Correct Answer
verified

Correct Answer
verified
When most companies within one industry ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The company may appeal the decision to t...
View Answer