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Consumer Law - 1

Page history last edited by abogado 12 years, 1 month ago

Law 19 Quizzes 

 

1. Through unfair trade practices, Super Sales Company induces Trey and other consumers to enter into one-sided deals. 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.

 

2. Through careless manufacturing practices, Insta-Market Company makes and sells unsafe products to Jess 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.

3. Frosty’s Appliance Store advertises freezers at a “Special Low Price of $299.” When Garth tries to buy one of the freezers, Huey, the salesperson, tells him that they are all sold and no more are obtainable. Huey adds that Frosty’s has other freezers for $2,299. This is

 

a. a legitimate sales technique.

b. bait-and-switch advertising.

c. counteradvertising.

d. puffery.

 

 

4. Orange Company makes computers. The company’s ad states that “if you aren’t eatin’ an Orange, you aren’t gettin’ any ‘C.” ” The Federal Trade Com­mission would consider this ad

 

a. false and misleading.

b. false only.

c. misleading only.

d. neither false nor misleading.

 

 

5. Miracle Products, Inc., engages in de­ceptive advertising when it markets its product Weight-Off as able to help consumers lose weight in their sleep. Miracle is ordered to include in all future adver­tising of Weight-Off the statement, “Weight-Off will not cause anyone to lose weight in their sleep.” This is

 

a. a counteradvertising order.

b. a multiple product order.

c. bait-and-switch advertising.

d. excessive abuse of authority.

 

 

6. Precise GPS Company’s ad states that its product is “the finest that money can buy.” Because of this ad, the Federal Trade Com­mission is most likely to issue

 

a. a cease-and-desist order only.

b. a cease-and-desist order or a counteradvertising order.

c. a counteradvertising order only.

d. neither a cease-and-desist order nor a counteradvertising order.

 

 

7. Vanna and many other consumers complain to the Federal Trade Commission (FTC) that a Whoopie Wonders Company ad is deceptive. The FTC’s first step is to

 

a. draft a formal complaint.

b. investigate.

c. issue a cease-and-desist order.

d. require counteradvertising.

 

 

8. Cleaners & Solvents, Inc. (CSI), engages in de­ceptive advertising when it markets its product Dirt Remover as able to kill germs over long periods of time. In an action against CSI regarding Dirt Remover, the firm is ordered to stop its false advertis­ing of Dirt Remover and other products. This is

 

a. a counteradvertising order.

b. a multiple product order.

c. bait-and-switch advertising.

d. excessive abuse of authority.

 

 

9. Consumer Products, Inc. (CPI), in its ads, makes claims about its prod­ucts that are obvious exaggerations and claims that are false but appear to be true. CPI may be subject to sanctions for

 

a. neither the false claims nor the obvious exaggerations.

b. only the false claims.

c. only the obvious exaggerations.

d. the false claims and the obvious exaggerations.

 

10. GR8 Fashion, Inc., complains to the Federal Trade Commission (FTC) about an ad broadcast by Hott Clothes Company, GR8’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 order.

d. permit A to broadcast similarly deceptive counteradvertising.

 

 

11. Penny Stock Company faxes ads to Quality Personnel Corporation and other businesses without the recipients’ permission. This is

 

a. illegal.

b. legal and smart because such ads are generally cheap.

c. legal but not smart because such ads are generally ineffective.

d. legal but only potentially smart, depending on the response rate.

 

 

12. Travel Tours Company faxes ads to Uri 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.

 

 

13. To generate sales, Yakkity-Yak, Inc., uses phone solicitation. Under federal law and Federal Trade Commission regulations, in soliciting business, Yakkity-Yak’s telemarketers must

 

a. disclose all material facts related to a sale.

b. identify the seller’s name (only if asked).

c. refrain from calling consumers who have not requested a call.

d. speak clearly and conspicuously.

 

 

14. Like other manufacturers and sellers, Useful Products Company packages its products with labels. Under federal law, such labels must be

 

a. accurate and use easily understood words.

b. bright and feature eye-catching colors.

c. graphically distinctive and well-designed.

d. interesting and revealing to the average consumer.

 

15. Like other manufacturers and sellers, Peoples Products Corporation labels its goods. Federal labeling and packaging rules are enforced by the Federal Trade Commission and

 

a. the U.S. Department of Commerce.

b. the U.S. Department of Health and Human Services.

c. the U.S. Department of Justice.

d. the U.S. Department of the Treasury.

 

16. Ron signs a contract with Sam, a door-to-door salesperson for Tutors, Inc., to buy a foreign-language course. To cancel the contract, Ron has up to

 

a. three days.

b. thirty days.

c. sixty days.

d. ninety days.

 

17. Special Roast Coffee, Inc., processes and sells a variety of coffee products. Special Roast’s product packages must include

 

a. neither the contents’ net quantity nor the product’s identity.

b. the contents’ net quantity and the product’s identity.

c. the contents’ net quantity only.

d. the product’s identity only.

 

 

 

18. Friendly Loan Company extends credit in the ordinary course of its busi­ness. Under the Truth-in-Lending Act, Friendly must inform potential borrowers of

 

a. credit terms offered by other lenders and its own credit terms.

b. only credit terms offered by other lenders.

c. only its own credit terms.

d. only the credit terms that will convince borrowers to “close the deal.”

 

 

 

19. Luscious Treats, Inc., wants to market a new snack food. On the prod­uct’s la­bel, standard nutrition facts are

 

a. mandated by the U.S. Chamber of Commerce.

b. required by the Nutrition Labeling and Education Act.

c. strictly voluntary.

d. warranted by the nature of the food.

 

 

 

20. Brad borrows $20,000 from City Bank to repair his home and to buy a car. Brad buys a stereo from Delta Discount Store in a transaction financed by Delta. 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.

 

 

 

 

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