Question 1

The FTC now requires used car sellers to affix a ________ to the cars that they sell.

Accepted Answer

A)  fixed price 
B)  buyer's guide 
C)  base price 
D)  discount price 
A)  fixed price 
B)  buyer's guide 
C)  base price 
D)  discount price

Question 2

The labeling of medical devices is under the jurisdiction of the Food and Drug Administration.

Accepted Answer

A) True 
 B)False

Question 3

Fact Pattern 17-2
Janie is a pharmacist in Small City. At the direction of several physicians in Small City, she begins mixing up a treatment for indigestion that is prescribed by the physicians. She advertises the mixture, and she and prescribing physicians see a large increase in business. Other pharmacists who do not want to bother with mixing begin to complain. Janie takes the position that it is a free country, and she can do as she pleases since there is no evidence that the mixture is harmful; and it is particularly helpful for those individuals who have had reactions to other indigestion medication.
-Refer to fact pattern 17-2. Is it legal for her to advertise the product?

Accepted Answer

A)  No 
B)  Only if it has been approved by the Food and Drug Administration 
C)  Only if it is sold for under $50 
D)  Yes 
A)  No 
B)  Only if it has been approved by the Food and Drug Administration 
C)  Only if it is sold for under $50 
D)  Yes

Question 4

________ is the legal procedure by which a creditor may collect a debt by attaching a portion of a debtor's weekly wages.

Accepted Answer

A)  Rescission 
B)  Garnishment 
C)  Joinder 
D)  Attachment 
A)  Rescission 
B)  Garnishment 
C)  Joinder 
D)  Attachment

Question 5

State may regulate odometer tampering,but there is no federal law that does so.

Accepted Answer

A) True 
 B)False

Question 6

The Equal Credit Opportunity Act originally intended to prevent discrimination against ________ in the advancement of credit.

Accepted Answer

A)  religion 
B)  age 
C)  women 
D)  color 
A)  religion 
B)  age 
C)  women 
D)  color

Question 7

The Federal Commerce Commission has adopted guidelines specifying when manufacturers and marketers can label their products "Made in USA."

Accepted Answer

A) True 
 B)False

Question 8

State laws regulating genetically modified food are typically declared unconstitutional on the basis that they are preempted by federal law.

Accepted Answer

A) True 
 B)False

Question 9

The Truth-in-Lending Act (TILA)is intended to assure a truthful loan application by the consumer.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true regarding USDA standards for organic food?

Accepted Answer

A)  Neither pesticides, genetic engineering, growth hormones, nor irradiation may be used. 
B)  Pesticides may be used, but genetic engineering and the use of growth hormones is disallowed. 
C)  Pesticides and irradiation may not be used, but genetic engineering and the use of growth hormones is allowed. 
D)  The USDA has no standards for organic food. 
A)  Neither pesticides, genetic engineering, growth hormones, nor irradiation may be used. 
B)  Pesticides may be used, but genetic engineering and the use of growth hormones is disallowed. 
C)  Pesticides and irradiation may not be used, but genetic engineering and the use of growth hormones is allowed. 
D)  The USDA has no standards for organic food.

Question 11

Under the Magnuson-Moss Warranty Act,a seller who offers a written warranty on goods must provide a full warranty.

Accepted Answer

A) True 
 B)False

Question 12

A car loan is an example of a closed-end credit transaction.

Accepted Answer

A) True 
 B)False

Question 13

The U.S.Supreme Court has ruled that compounded drugs are illegal.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true regarding the placement of health claims for foods on labels?

Accepted Answer

A)  The FDA permits health food claims on labels without FDA approval as a new drug or the risk of sanctions for issuing a misbranded product, as long as the claim has been certified by the FDA as being supported by significant scientific agreement. 
B)  The FDA disallows health food claims on labels unless the food has been approved by the FDA as a type of new drug for the health concern involved. 
C)  The FDA allows health food claims on labels so long as the claim has not been certified by the FDA as false and misleading. 
D)  The FDA allows health food claims on labels without prior approval of the FDA only for organically grown foods. 
A)  The FDA permits health food claims on labels without FDA approval as a new drug or the risk of sanctions for issuing a misbranded product, as long as the claim has been certified by the FDA as being supported by significant scientific agreement. 
B)  The FDA disallows health food claims on labels unless the food has been approved by the FDA as a type of new drug for the health concern involved. 
C)  The FDA allows health food claims on labels so long as the claim has not been certified by the FDA as false and misleading. 
D)  The FDA allows health food claims on labels without prior approval of the FDA only for organically grown foods.

Question 15

In a _________,the seller offers the buyer a commission,rebate,or discount for furnishing the seller with a list of additional prospective customers.

Accepted Answer

A)  pyramid sale 
B)  referral sale 
C)  commission sale 
D)  rebate sale 
A)  pyramid sale 
B)  referral sale 
C)  commission sale 
D)  rebate sale

Question 16

Which of the following is true regarding the labeling of food imported into the U.S.?

Accepted Answer

A)  Labeling of food imports is not required on the part of grocery stores or restaurants. 
B)  All grocery stores must label certain products, including unprocessed beef and pork, with the country of origin; but restaurants are exempt. 
C)  Grocery stores and restaurants, with no exceptions, must inform customers of the country of origin of certain products including beef and pork. 
D)  Grocery stores must label certain products, including unprocessed beef and pork, with the country of origin; but restaurants and some retail grocery stores with sales under a certain amount are exempt. 
A)  Labeling of food imports is not required on the part of grocery stores or restaurants. 
B)  All grocery stores must label certain products, including unprocessed beef and pork, with the country of origin; but restaurants are exempt. 
C)  Grocery stores and restaurants, with no exceptions, must inform customers of the country of origin of certain products including beef and pork. 
D)  Grocery stores must label certain products, including unprocessed beef and pork, with the country of origin; but restaurants and some retail grocery stores with sales under a certain amount are exempt.

Question 17

In relation to food,which of the following is considered an additive?

Accepted Answer

A)  Pesticide residue 
B)  Unintended environmental contaminants 
C)  Substances unavoidably added from packaging 
D)  Pesticide residue, unintended environmental contaminants, and substances unavoidably added from packaging 
A)  Pesticide residue 
B)  Unintended environmental contaminants 
C)  Substances unavoidably added from packaging 
D)  Pesticide residue, unintended environmental contaminants, and substances unavoidably added from packaging

Question 18

The U.S.Department of Agriculture inspects facilities engaged in egg production.

Accepted Answer

A) True 
 B)False

Question 19

The Fair Credit Reporting Act does not give consumers a right to have corrected copies of their credit reports sent to creditors.

Accepted Answer

A) True 
 B)False

Question 20

Unsolicited merchandise sent by U.S.mail may be kept by the recipient without incurring any obligation to the sender.

Accepted Answer

A) True 
 B)False

Exam 17: Consumer Protection

The FTC now requires used car sellers to affix a ________ to the cars that they sell.

The labeling of medical devices is under the jurisdiction of the Food and Drug Administration.

________ is the legal procedure by which a creditor may collect a debt by attaching a portion of a debtor's weekly wages.

State may regulate odometer tampering,but there is no federal law that does so.

The Equal Credit Opportunity Act originally intended to prevent discrimination against ________ in the advancement of credit.

The Federal Commerce Commission has adopted guidelines specifying when manufacturers and marketers can label their products "Made in USA."

State laws regulating genetically modified food are typically declared unconstitutional on the basis that they are preempted by federal law.

The Truth-in-Lending Act (TILA)is intended to assure a truthful loan application by the consumer.

Which of the following is true regarding USDA standards for organic food?

Under the Magnuson-Moss Warranty Act,a seller who offers a written warranty on goods must provide a full warranty.

A car loan is an example of a closed-end credit transaction.

The U.S.Supreme Court has ruled that compounded drugs are illegal.

Which of the following is true regarding the placement of health claims for foods on labels?

In a _________,the seller offers the buyer a commission,rebate,or discount for furnishing the seller with a list of additional prospective customers.

Which of the following is true regarding the labeling of food imported into the U.S.?

In relation to food,which of the following is considered an additive?

The U.S.Department of Agriculture inspects facilities engaged in egg production.

The Fair Credit Reporting Act does not give consumers a right to have corrected copies of their credit reports sent to creditors.

Unsolicited merchandise sent by U.S.mail may be kept by the recipient without incurring any obligation to the sender.

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