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LEGL 2301- Chapter 24 Quiz

front 1 False	back 1 State consumer protection agencies are charged by Congress with the broadly stated goal of preventing unfair and deceptive trade practices
front 2 False	back 2 Advertising that appears to be based on factual evidence will not be deemed deceptive even if it is not reasonably supported by evidence
front 3 True	back 3 A sanction known as counter-advertising requires a company to advertise anew to inform the public about earlier misinformation.
front 4 False	back 4 Advertising that contains an endorsement by a celebrity will not be deemed deceptive.

front 5 False	back 5 Deceptive advertising does not occur in the online environment.
front 6 False	back 6 Puffery constitutes deceptive advertising.
front 7 False	back 7 The Consumer Product Safety Commission is the primary agency that issues regulations on food labeling.
front 8 False	back 8 Labels on fresh meats are not required to indicate where the food originated.

front 9 False	back 9 Restaurants must post guidelines on the number of calories that an average person requires daily.
front 10 True	back 10 The Federal Reserve Board of Governors has issued a regulation that governs credit provisions associated with sales contracts—Regulation Z.
front 11 True	back 11 Merchants must issue a refund within a specified period of time when a consumer cancels an order.
front 12 True	back 12 The Food and Drug Administration must ensure the safety of new medications.

front 13 True	back 13 The Consumer Product Safety Commission conducts research on the safety of individual consumer products and maintains a clearinghouse on the risks associated with various products.
front 14 False	back 14 The Food and Drug Administration does not have the authority to directly recall any food products that it suspects are tainted but must rely on the producers to recall items.
front 15 True	back 15 Insurance companies must spend at least 85 percent of all premium dollars from large employers on benefits and quality improvements.
front 16 False	back 16 Credit can be denied solely on the basis of race.

front 17 True	back 17 Account numbers on credit-card receipts must be truncated (shortened).
front 18 True	back 18 A credit-card company must send monthly bills to cardholders twenty-one days before the due date.
front 19 False	back 19 Major credit reporting agencies must provide consumers with free copies of their own credit reports every six months.
front 20 True	back 20 A debt-collection agency is someone who regularly attempts to collect debts on behalf of someone else, usually for a percentage of the amount owed.

front 21 a. federal and state law	back 21 Through careless manufacturing practices, Metalworks Company makes and distributes unsafe products that are sold to Nabi and other consumers. This may be subject to sanctions under a. federal and state law b. federal law only c. no law, according to the principles of freedom to contract d. state law only
front 22 d. none of the choices	back 22 Slow-Brew Coffee Company sells coffee and related beverages. The company's ad contends that ambitious businesspersons "Drink Us & Rise Up in the World!' " The Federal Trade Commission would consider this ad to be a. false and misleading b. impermissibly vague and general c. a deceptive half-truth d. none of the choices
front 23 d. none of the choices	back 23 SmartPhone Company's ad states that its product is "The Best that Money Can Buy." Because of this ad, the Federal Trade Commission is most likely to issue a. a cease-and-desist order b. a counter-advertising order c. a multiple product order d. none of the choices
front 24 b. a multiple product order	back 24 Mouth & Gums, Inc. (CSI), engages in deceptive advertising when it markets its product Oral Rinse as able to kill germs over long periods of time. In an action against Mouth & Gums, the firm is ordered to stop its false advertising of Oral Rinse and other products. This is a. counter-advertising b. a multiple product order c. a "cooling-off" law d. a validation notice

front 25 b. draft a formal complaint	back 25 Spicy Salsa, Inc., complains to the Federal Trade Commission (FTC) about an ad broadcast by Tangy Taco Sauce Company, Spicy Salsa's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to a. conduct negotiations between the competitors b. draft a formal complaint c. issue a cease-and-desist d. permit Spicy Salsa to broadcast similarly deceptive counter-advertising
front 26 c. possible fines by the Federal Communications Commission	back 26 Medi-Insurance Company faxes ads to Nancy and other individual consumers without the recipients' permission. This is subject to a. a cease-and-desist order by the Federal Trade Commission b. no sanctions c. possible fines by the Federal Communications Commission d. rescission on the order of the Federal Reserve Board
front 27 d. warranted by the nature of the food	back 27 Sweet Treats, Inc., wants to market a new snack food. On the product's label, standard nutrition facts are a. prohibited b. required c. strictly voluntary d. warranted by the nature of the food
front 28 a. a restaurant chain with twenty or more locations	back 28 Sweet Treats, Inc., wants to market a new snack food. On the product's label, standard nutrition facts are a. a restaurant chain with twenty or more locations b. a food distributor with twenty or more customers c. a food processor with twenty or more products d. a food producer with twenty or more acres

front 29 d. the Food and Drug Administration	back 29 Nature's Food Market sells groceries. Metro Snacks & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to prevent unsafe food and drugs from being sold is a. nature's Food Market and Metro Snacks & Druge STore b. Metro Snacks & Drug Store only c. the Federal Trade Commission d. The Food and Drug Administration
front 30 d. remove the tool from the market	back 30 Grid Tool Company makes and sells tools. One of the tools is believed to be hazardous. The appropriate government agency may require Grid to a. export the tool and sell it only abroad b. increase the price to cover the cost of any injuries or damage c. reduce the price to indicate the hazard to consumers d. remove the tool from the market
front 31 d. the Truth-in-Lending Act	back 31 Grover signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances—stove, refrigerator, dishwasher, microwave, and toasteroven—for $3,999. This transaction is subject to a. no federal law b. the Fair Credit Reporting Act c. the Telecommunications Act d. the Truth-in-Lending Act
front 32 d. Truth-in-Lending Act	back 32 Tory borrows $10,000 from USA National Bank to remodel a room in her home. This transaction is subject to a. no federal law b. the Consumer Leasing Act c. the Consumer Product Safety Act d. the Truth-in-Lending Act

front 33 d. the car loan, the home repair loan, and the retail installment sale	back 33 Cecilia borrows $20,000 from Debit & Credit Union to repair her home and to buy a car. She buys a laptop from eStuf Store in a transaction financed by the seller. If these parties are subject to the Truth-in-Lending Act, Regulation Z applies to a. the car loan only b. the home repair loan only c. the retail installment sale only d. the car loan, the home repair loan, and the retail installment sale
front 34 d. race	back 34 QuikPay Inc. extends credit to consumers. QuikPay is subject to the Equal Credit Opportunity Act, which prohibits credit discrimination based on a. intelligence b. education c. income d. race
front 35 d. not liable for any amount	back 35 Jasmine receives an unsolicited credit card in the mail and tosses it on her desk. Without Jasmine's permission, her roommate Ilene uses the card to buy a new tablet for $500. Jasmine is a. liable for $500 b. liable for $250 c. liable for $50 d. not liable for any amount
front 36 b. an assessment of damages	back 36 In the ordinary course of business, Loan2Buy Corporation offers credit to Mai and other consumers and reports on the loans to credit agencies. To save time and money, Loan2Buy generally does not correct or update its reported information. This is most likely to result in a. a levy of a nominal fine b. an assessment of damages c. an order of rescission of the loan contracts d. no sanctions

front 37 c. the Fair Debt Collections Practices Act	back 37 Debt & Loan Collection Agency calls Ethel several times a day, and sometimes in the middle of the night, about an overdue bill that a Furniture4U store turned over to Debt & Loan for collection. This is a violation of a. no federal law b. the Fair and Accurate Credit Transactions Act c. the fair Debt Collection Practices Act d. the Truth-in-Lending Act
front 38 a. no federal law	back 38 Lucy takes out a student loan from Midtown Bank. When she fails to make the scheduled payments for six months, Midtown advises her of further action that it will take. This violates a. no federal law b. the Fair and Accurate Credit Transactions Act c. the Fair Debt Collection Practices Act d. the Truth-in-Lending Act
front 39 a. no federal law	back 39 Kip opens an account at a Lotsa Goodies Store, and buys a digital music player and other items, but makes no payments on the account. To collect the debt, Mako, the manager, contacts Kip's parents. This violates a. no federal law b. the Fair and Accurate Credit Transactions Act c.the Fair Debt Collection Practices Act d. the Truth-in-Lending Act
front 40 c. the Fair Debt Collection Practices Act	back 40 The credit department of Discount Retail Stores Inc. calls Emmett at work about an overdue bill. Emmett's employer objects. Discount Retail's credit department continues to call Emmett at work. This is a violation of a. no federal law b. the Fair and Accurate Credit Transactions Act c. the Fair Debt Collection Practices Act d. the Truth-in-Lending Act