Question 1

[Miracle Pill] Julia advertised that she had developed a pill for women that would result in weight loss,wrinkle loss,and improved vitality;and that for men would result in all those things,plus hair growth.Her television advertisement showed miracle results allegedly obtained by consumers.Julia 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 Julia had no reasonable basis for the claims she made in advertisements.Julia 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 requiring that Julia stop advertising and selling the pills.After losing all appeals,Julia continued selling the pills until she was fined by the Federal Trade Commission.She has since left the country and cannot be located.
-Julia's defense that generalities and clear exaggerations are allowable by law is known as ________.

Accepted Answer

A)  Swelling
B)  Exaltation
C)  Boasting
D)  Crowing
E)  PuffingF) None of the above
G) A) and B)

Question 2

The Federal Food,Drug,and Cosmetic Act protects against misbranded products.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following schemes involves websites attracting users by having them click on ads that appear to be,but are actually not,from well-known brands with the sites then installing spyware or viruses on computers?

Accepted Answer

A)  Bait-and-switch
B)  Click-to-deceit
C)  Bait-and-click
D)  Click-and-install
E)  Deceptive-clickF) A) and C)
G) B) and C)

Question 4

The Equal Credit Opportunity Act makes it illegal for creditors to deny credit to individuals on the basis of ________.

Accepted Answer

A)  Race,religion,color,sex,marital status,or age
B)  Race,religion,national origin,color,or sex
C)  Race,national origin,color,sex,marital status,or age
D)  Race,religion,national origin,color,sex,or age
E)  Race,religion,national origin,color,sex,marital status,or ageF) A) and E)
G) A) and D)

Question 5

The Federal Trade Commission was created by Congress in what year?

Accepted Answer

A)  1929
B)  1934
C)  1900
D)  1914
E)  1976F) A) and B)
G) C) and E)

Question 6

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

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

Question 7

Which of the following is NOT a way in which the Consumer Product Safety Act protects consumers?

Accepted Answer

A)  It issues and enforces mandatory standards regarding product safety.
B)  It works with industries to develop voluntary product safety standards.
C)  It can file lawsuits on behalf of a consumer who was injured.
D)  It can administer existing product safety legislation.
E)  It can ban consumer products from the market.F) A) and C)
G) A) and D)

Question 8

The Truth-in Lending Act applies to what types of loans?

Accepted Answer

A)  Loans to a natural person and to a limited partnerships
B)  Loans to a natural person,loans to a limited partnership,and loans to a general partnership
C)  Loans to natural person,loans to a limited partnership,loans to a general partnership,and loans to a corporation
D)  Loans to a natural person
E)  All loansF) A) and B)
G) A) and C)

Question 9

Registration on the Federal Trade Commission's "Do Not Call" registry lasts for how many years?

Accepted Answer

A)  Five years
B)  Four years
C)  Two years
D)  Three years
E)  There is no set expiration dateF) B) and E)
G) B) and D)

Question 10

After an FTC complaint,if the judge decides the company has violated the law,the FTC issues a consent order.

Accepted Answer

A) True 
 B)False

Question 11

Consumer laws created by the Federal Trade Commission to encourage businesses to stop unlawful behavior are known as which of the following?

Accepted Answer

A)  Industry interpretations
B)  Consumer guides
C)  Business requirements
D)  Industry guides
E)  Consumer recommendationsF) B) and D)
G) A) and E)

Question 12

A judge has determined that Billy's Widgets has engaged in deceptive advertising and the FTC has issued a cease and desist.Billy's Widgets disagrees and continues to run the advertisement anyway? What are the FTC's options?

Accepted Answer

A)  Fine the company only.
B)  Seek an injunction only
C)  Have the CEO of Billy's Widgets arrested
D)  File a civil lawsuit against Billy's widgets.
E)  Either seek an injunction or fine the company or both.F) A) and D)
G) A) and C)

Question 13

What does the Funeral Rule require of funeral home operators?

Accepted Answer

A)  They must inform consumers of the option of cremation
B)  They must provide itemized price information
C)  They must disclose profits to the FTC
D)  They must not charge above market price
E)  They must disclose profits to consumersF) A) and E)
G) C) and E)

Question 14

The Federal Food,Drug,and Cosmetic Act is enforced by which agency?

Accepted Answer

A)  The U.S.Food and Drug Administration
B)  The Federal Safety Commission
C)  The Federal Consumer Administration
D)  The Federal Consumption Administration
E)  The U.S.Uniform Drug CommissionF) A) and E)
G) All of the above

Question 15

If a person believes that she is a victim of identity theft,she may contact the FTC and an alert will be placed in her credit files.

Accepted Answer

A) True 
 B)False

Question 16

Regarding regulation of advertising in China,which of the following statements is accurate?

Accepted Answer

A)  For many years,China did not regulate advertising,but a new law is in effect imposing strict restrictions on advertising meant to protect consumers.
B)  China does not regulate advertising.
C)  A draft law lessens restrictions on advertising.
D)  A new draft law in China does not specify the type of person that a deceptive advertisement would affect,such as a reasonable consumer.
E)  For many years,China did not regulate advertising,but a new law is in effect imposing strict restrictions on advertising meant to protect consumers as well as businesses.F) C) and D)
G) A) and C)

Question 17

What is the purpose of the Do Not Call Registry?

Accepted Answer

A)  To give consumers a choice regarding telemarketing calls.
B)  To prohibit landline sales calls.
C)  To prohibit cell phone sales calls
D)  To prohibit all telephone sales calls.
E)  To give telemarketers restrictions on the hours in which phone calls may be made.F) B) and E)
G) None of the above

Question 18

A judge has determined that Billy's Widgets has engaged in deceptive advertising and the FTC has issued a cease and desist order.Billy's Widgets disagrees and believes its advertising is appropriate.What should Billy's Widgets do?

Accepted Answer

A)  Appeal the decision to the five commissioners of the FTC
B)  Continue the advertising anyway because the FTC cannot actually take any action
C)  Continue the advertising and file a First Amendment lawsuit in state court.
D)  Stop the advertising because the judge's ruling was the final word on the matter
E)  Negotiate a consent order with the FTC.F) A) and D)
G) All of the above

Question 19

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

Accepted Answer

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

Question 20

Which of the following does the Telephone Consumer Protection Act of 1991 make illegal?

Accepted Answer

A)  Telephone sales for consumers only.
B)  Transmitting ads via fax without the recipient agreeing to the fax transmission.
C)  Telephone sales for businesses only.
D)  Telephone sales calls before 10 AM.
E)  All forms of telephone sales.F) B) and E)
G) A) and C)

Exam 45: Consumer Law

Correct Answer
verified

After an FTC complaint,if the judge decides the company has violated the law,the FTC issues a consent order.

Correct Answer
verified

Which of the following is NOT a way in which the Consumer Product Safety Act protects consumers?

Correct Answer
verified

If a person believes that she is a victim of identity theft,she may contact the FTC and an alert will be placed in her credit files.

Correct Answer
verified

A judge has determined that Billy's Widgets has engaged in deceptive advertising and the FTC has issued a cease and desist order.Billy's Widgets disagrees and believes its advertising is appropriate.What should Billy's Widgets do?

Correct Answer
verified

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

Correct Answer
verified

The Federal Food,Drug,and Cosmetic Act is enforced by which agency?

Correct Answer
verified

What is the purpose of the Do Not Call Registry?

Correct Answer
verified

Consumer laws created by the Federal Trade Commission to encourage businesses to stop unlawful behavior are known as which of the following?

Correct Answer
verified

A judge has determined that Billy's Widgets has engaged in deceptive advertising and the FTC has issued a cease and desist.Billy's Widgets disagrees and continues to run the advertisement anyway? What are the FTC's options?

Correct Answer
verified

The Equal Credit Opportunity Act makes it illegal for creditors to deny credit to individuals on the basis of ________.

Correct Answer
verified

What does the Funeral Rule require of funeral home operators?

Correct Answer
verified

The Federal Trade Commission was created by Congress in what year?

Correct Answer
verified

The Federal Food,Drug,and Cosmetic Act protects against misbranded products.

Correct Answer
verified

Which of the following does the Telephone Consumer Protection Act of 1991 make illegal?

Correct Answer
verified

Regarding regulation of advertising in China,which of the following statements is accurate?

Correct Answer
verified

The Truth-in Lending Act applies to what types of loans?

Correct Answer
verified

Registration on the Federal Trade Commission's "Do Not Call" registry lasts for how many years?

Correct Answer
verified

Which of the following schemes involves websites attracting users by having them click on ads that appear to be,but are actually not,from well-known brands with the sites then installing spyware or viruses on computers?

Correct Answer
verified

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

Correct Answer
verified

Exam 45: Consumer Law

Correct AnswerverifiedShow Answer

After an FTC complaint,if the judge decides the company has violated the law,the FTC issues a consent order.

Correct AnswerverifiedShow Answer

Which of the following is NOT a way in which the Consumer Product Safety Act protects consumers?

Correct AnswerverifiedShow Answer

If a person believes that she is a victim of identity theft,she may contact the FTC and an alert will be placed in her credit files.

Correct AnswerverifiedShow Answer

A judge has determined that Billy's Widgets has engaged in deceptive advertising and the FTC has issued a cease and desist order.Billy's Widgets disagrees and believes its advertising is appropriate.What should Billy's Widgets do?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The Federal Food,Drug,and Cosmetic Act is enforced by which agency?

Correct AnswerverifiedShow Answer

What is the purpose of the Do Not Call Registry?

Correct AnswerverifiedShow Answer

Consumer laws created by the Federal Trade Commission to encourage businesses to stop unlawful behavior are known as which of the following?

Correct AnswerverifiedShow Answer

A judge has determined that Billy's Widgets has engaged in deceptive advertising and the FTC has issued a cease and desist.Billy's Widgets disagrees and continues to run the advertisement anyway? What are the FTC's options?

Correct AnswerverifiedShow Answer

The Equal Credit Opportunity Act makes it illegal for creditors to deny credit to individuals on the basis of ________.

Correct AnswerverifiedShow Answer

What does the Funeral Rule require of funeral home operators?

Correct AnswerverifiedShow Answer

The Federal Trade Commission was created by Congress in what year?

Correct AnswerverifiedShow Answer

The Federal Food,Drug,and Cosmetic Act protects against misbranded products.

Correct AnswerverifiedShow Answer

Which of the following does the Telephone Consumer Protection Act of 1991 make illegal?

Correct AnswerverifiedShow Answer

Regarding regulation of advertising in China,which of the following statements is accurate?

Correct AnswerverifiedShow Answer

The Truth-in Lending Act applies to what types of loans?

Correct AnswerverifiedShow Answer

Registration on the Federal Trade Commission's "Do Not Call" registry lasts for how many years?

Correct AnswerverifiedShow Answer

Which of the following schemes involves websites attracting users by having them click on ads that appear to be,but are actually not,from well-known brands with the sites then installing spyware or viruses on computers?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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