Question 1

A credit cardholder is not liable for any unauthorized charges made before the time the creditor is notified that the card is lost.

Accepted Answer

A) True 
 B)False  False

Question 2

Because the government knows CO2 pollution causes climate change, a young generation might succeed in a suit alleging that by failing to address this cause the government is violating their constitutional rights.

Accepted Answer

A) True 
 B)False  True

Question 3

Metal Foundry Inc.'s complex spews smoke and odors. The site features its own rail system, and trucks enter and exit the complex night and day. Neal and other residents of an adjacent neighborhood can feel the vibrations of the trains and trucks, and suffer other effects from the operations. Neal and others file a suit against Metal Foundry. Why might the court rule in favor of the defendant?

Accepted Answer

The court might rule in favor of Metal Foundry, or at least decline to enjoin its operations, on the ground that the hardships to be imposed on Metal Foundry and on the community are greater than the hardships suffered by Neal and the other residents of the nearby neighborhood, despite the pollution and noise. The court might deny an injunction if the Metal Foundry plant is the heart of the local economy, for example, and award the residents only damages.

Question 4

The Federal Food, Drug, and Cosmetic Act protects consumers against contaminated and misbranded food and drugs.

Accepted Answer

A) True 
 B)False

Question 5

An environmental impact statement includes a formal analysis of the impact of any major federal action that will significantly affect the environment.

Accepted Answer

A) True 
 B)False

Question 6

To minimize potential liability under Superfund, a business can conduct its own regular environmental compliance audits of its operations.

Accepted Answer

A) True 
 B)False

Question 7

Retail Properties, Inc., wants to build a parking ramp to connect to its Shoppers Mall, both of which are on private land. For this action, an environmental impact statement is

Accepted Answer

A)  prohibited. 
B)  required. 
C)  unnecessary. 
D)  voluntary. 
A)  prohibited. 
B)  required. 
C)  unnecessary. 
D)  voluntary.

Question 8

Employees might sue an employer whose failure to use pollution controls contaminated the air and caused the employees to suffer respiratory illnesses.

Accepted Answer

A) True 
 B)False

Question 9

An ad is more likely to be considered fair if its benefit to consumers or the competition outweighs any injury it might cause to the interests of consumers.

Accepted Answer

A) True 
 B)False

Question 10

Cutting Edge Inc. makes and sells tools. One of the tools is believed to be hazardous. The firm may be required to

Accepted Answer

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. 
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.

Question 11

Because consumers may not read an entire web page, an online disclosure should be placed as close as possible to any claim being qualified.

Accepted Answer

A) True 
 B)False

Question 12

Clean Wash Inc. operates a chain of car washes throughout the United States. The government entity that is most likely to be involved in regulating the chain's environmental impact is

Accepted Answer

A)  Congress. 
B)  federal and state regulatory agencies. 
C)  local chambers of commerce. 
D)  local police departments. 
A)  Congress. 
B)  federal and state regulatory agencies. 
C)  local chambers of commerce. 
D)  local police departments.

Question 13

Regulation Z was issued by the Federal Reserve Board of Governors to implement the disclosure requirements of the Truth-in-Lending Act.

Accepted Answer

A) True 
 B)False

Question 14

A deceptive ad for a product involving wrongful charges to consumers may result in an award of damages of a defendant's unjust gains and consumers' losses.

Accepted Answer

A) True 
 B)False

Question 15

Direct Sales Corporation sells products to consumers over the phone, through the mail, and online. Under the Federal Trade Commission's Mail or Telephone Order Merchandise Rule, the firm may be liable for failing to

Accepted Answer

A)  ship orders within the time promised in its ads. 
B)  notify consumers when orders are shipped. 
C)  provide a cooling-off period of three days before shipping. 
D)  all of the choices. 
A)  ship orders within the time promised in its ads. 
B)  notify consumers when orders are shipped. 
C)  provide a cooling-off period of three days before shipping. 
D)  all of the choices.

Question 16

A consumer may recover under a state consumer-fraud statute, even if he or she has not suffered actual damages proximately caused by a deceptive act.

Accepted Answer

A) True 
 B)False

Question 17

The Truth-in-Lending Act applies to a loan between two consumers because in that transaction, the lender is a person who in the ordinary course of business is extending credit.

Accepted Answer

A) True 
 B)False

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

Question 19

Without a permit from the U.S. Army Corps of Engineers, Condos Corporation fills a wetlands area that it owns in preparation for the construction of a housing complex. Under the Clean Water Act, this is most likely

Accepted Answer

A)  a violation. 
B)  not a violation because a permit is not needed to fill wetlands. 
C)  not a violation because the area was filled before construction. 
D)  not a violation because there was no discharge of pollution. 
A)  a violation. 
B)  not a violation because a permit is not needed to fill wetlands. 
C)  not a violation because the area was filled before construction. 
D)  not a violation because there was no discharge of pollution.

Question 20

Corner Market sells groceries. Deli & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to prevent unsafe food and drugs from being sold is

Accepted Answer

A)  Corner Market and Deli & Drug. 
B)  Deli & Drug only. 
C)  the Federal Trade Commission. 
D)  the Food and Drug Administration. 
A)  Corner Market and Deli & Drug. 
B)  Deli & Drug only. 
C)  the Federal Trade Commission. 
D)  the Food and Drug Administration.

Exam 39: Consumer and Environmental Law

A credit cardholder is not liable for any unauthorized charges made before the time the creditor is notified that the card is lost.

Because the government knows CO2 pollution causes climate change, a young generation might succeed in a suit alleging that by failing to address this cause the government is violating their constitutional rights.

The Federal Food, Drug, and Cosmetic Act protects consumers against contaminated and misbranded food and drugs.

An environmental impact statement includes a formal analysis of the impact of any major federal action that will significantly affect the environment.

To minimize potential liability under Superfund, a business can conduct its own regular environmental compliance audits of its operations.

Retail Properties, Inc., wants to build a parking ramp to connect to its Shoppers Mall, both of which are on private land. For this action, an environmental impact statement is

Employees might sue an employer whose failure to use pollution controls contaminated the air and caused the employees to suffer respiratory illnesses.

An ad is more likely to be considered fair if its benefit to consumers or the competition outweighs any injury it might cause to the interests of consumers.

Cutting Edge Inc. makes and sells tools. One of the tools is believed to be hazardous. The firm may be required to

Because consumers may not read an entire web page, an online disclosure should be placed as close as possible to any claim being qualified.

Clean Wash Inc. operates a chain of car washes throughout the United States. The government entity that is most likely to be involved in regulating the chain's environmental impact is

Regulation Z was issued by the Federal Reserve Board of Governors to implement the disclosure requirements of the Truth-in-Lending Act.

A deceptive ad for a product involving wrongful charges to consumers may result in an award of damages of a defendant's unjust gains and consumers' losses.

Direct Sales Corporation sells products to consumers over the phone, through the mail, and online. Under the Federal Trade Commission's Mail or Telephone Order Merchandise Rule, the firm may be liable for failing to

A consumer may recover under a state consumer-fraud statute, even if he or she has not suffered actual damages proximately caused by a deceptive act.

The Truth-in-Lending Act applies to a loan between two consumers because in that transaction, the lender is a person who in the ordinary course of business is extending credit.

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

Without a permit from the U.S. Army Corps of Engineers, Condos Corporation fills a wetlands area that it owns in preparation for the construction of a housing complex. Under the Clean Water Act, this is most likely

Corner Market sells groceries. Deli & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to prevent unsafe food and drugs from being sold is

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Constitutional Law

Ethics in Business

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