Question 1

The Supreme Court ruled that a "rule of reason" standard should apply to fair trade agreements,weighing their anticompetitive effects against their benefits.

Accepted Answer

A) True 
 B)False

Question 2

The Equal Credit Opportunity Act:

Accepted Answer

A)  regulates the reporting and use of credit information; limits consumer liability for stolen credit cards to $50. 
B)  prohibits discrimination in credit transactions because of gender, marital status, race, national origin, religion, age, or receipt of public assistance. 
C)  empowers the FTC to determine rules concerning consumer warranties and provides for consumer access to means of redress, such as the "class action" suit. 
D)  makes it a federal crime to defraud consumers through use of the mail. 
E)  requires lenders to state the true costs of a credit transaction; established a National Commission on Consumer Finance. 
A)  regulates the reporting and use of credit information; limits consumer liability for stolen credit cards to $50. 
B)  prohibits discrimination in credit transactions because of gender, marital status, race, national origin, religion, age, or receipt of public assistance. 
C)  empowers the FTC to determine rules concerning consumer warranties and provides for consumer access to means of redress, such as the "class action" suit. 
D)  makes it a federal crime to defraud consumers through use of the mail. 
E)  requires lenders to state the true costs of a credit transaction; established a National Commission on Consumer Finance.

Question 3

When Taco Bell requires its franchisees to purchase all their raw materials and supplies from the franchisor in order for the franchisor to maintain quality control,it is:

Accepted Answer

A)  engaging in an illegal exclusive distribution agreement. 
B)  enforcing an illegal tying agreement. 
C)  employing a dual distribution agreement. 
D)  violating the franchisee's right to fair trade. 
E)  enforcing a tying agreement, which courts generally consider legal as long as there is sufficient proof that these arrangements are necessary to maintain quality control. 
A)  engaging in an illegal exclusive distribution agreement. 
B)  enforcing an illegal tying agreement. 
C)  employing a dual distribution agreement. 
D)  violating the franchisee's right to fair trade. 
E)  enforcing a tying agreement, which courts generally consider legal as long as there is sufficient proof that these arrangements are necessary to maintain quality control.

Question 4

When a retailer represents merchandise as being made by a firm other than the true manufacturer,it is said to be engaged in:

Accepted Answer

A)  palming off. 
B)  product substitution. 
C)  gray marketing. 
D)  overt faking. 
E)  a bait-and-switch. 
A)  palming off. 
B)  product substitution. 
C)  gray marketing. 
D)  overt faking. 
E)  a bait-and-switch.

Question 5

A _____ agreement exists when the supplier offers the retailer the exclusive distribution of a merchandise line or product,and in return the retailer agrees not to handle competing brands.

Accepted Answer

A)  one-way exclusive 
B)  two-way exclusive 
C)  three-way exclusive 
D)  tying 
E)  full-line 
A)  one-way exclusive 
B)  two-way exclusive 
C)  three-way exclusive 
D)  tying 
E)  full-line

Question 6

Which of the following laws prohibit retailers from operating in certain locations and require building and sign specifications to be met?

Accepted Answer

A)  Zoning laws 
B)  Franchise laws 
C)  Blue laws 
D)  Taxing laws 
E)  Canon laws 
A)  Zoning laws 
B)  Franchise laws 
C)  Blue laws 
D)  Taxing laws 
E)  Canon laws

Question 7

Bait-and-switch advertising:

Accepted Answer

A)  is illegal for all products retailing over $10. However, under the FTC Act, bait-and-switch is legal if puffery was also included in the advertisements and the product price is under $10. 
B)  does not apply to services. 
C)  is a form of deceitful diversion of patronage. 
D)  is permissible if interstate commerce is not involved. 
E)  occurs when a product is advertised at an unrealistically low price to serve as "bait" and then the salesperson tries to "switch" the customer to a higher-priced product. 
A)  is illegal for all products retailing over $10. However, under the FTC Act, bait-and-switch is legal if puffery was also included in the advertisements and the product price is under $10. 
B)  does not apply to services. 
C)  is a form of deceitful diversion of patronage. 
D)  is permissible if interstate commerce is not involved. 
E)  occurs when a product is advertised at an unrealistically low price to serve as "bait" and then the salesperson tries to "switch" the customer to a higher-priced product.

Question 8

The _____ Act makes it a federal crime to defraud consumers through use of the mail.

Accepted Answer

A)  Sherman 
B)  Federal Trace Commission 
C)  Mail Fraud 
D)  Automobile Information Disclosure 
E)  Fair Packaging and Labeling 
A)  Sherman 
B)  Federal Trace Commission 
C)  Mail Fraud 
D)  Automobile Information Disclosure 
E)  Fair Packaging and Labeling

Question 9

_____ occurs when two retailers buy an identical amount of "like grade and quality" merchandise from the same supplier but pay different prices.

Accepted Answer

A)  Horizontal price fixing 
B)  Vertical price fixing 
C)  Price discrimination 
D)  Deceptive pricing 
E)  Predatory pricing 
A)  Horizontal price fixing 
B)  Vertical price fixing 
C)  Price discrimination 
D)  Deceptive pricing 
E)  Predatory pricing

Question 10

The Federal Trade Commission's main concern with deceptive advertising is not with the intent of the advertiser,but whether the consumer was misled by the advertising.

Accepted Answer

A) True 
 B)False

Question 11

The courts have interpreted the "foreseeability" doctrine to suggest that retailers must be careful selecting which products they will sell and how they will sell these products.

Accepted Answer

A) True 
 B)False

Question 12

Vertical price fixing is also referred to as resale price maintenance or "fair trade."

Accepted Answer

A) True 
 B)False

Question 13

Attempts by a manufacturer to limit the geographical area in which a retailer may resell its products are called _____ restrictions.

Accepted Answer

A)  geographical 
B)  sales 
C)  territorial 
D)  tying 
E)  physical 
A)  geographical 
B)  sales 
C)  territorial 
D)  tying 
E)  physical

Question 14

The Celler-Kefauver Antimerger Act:

Accepted Answer

A)  prohibits unfair and deceptive acts and practices regardless of whether competition is injured. 
B)  establishes protection for trademarks. 
C)  defines price discrimination as unlawful (subject to certain defenses) and provides the FTC with the right to establish limits on quantity discounts. 
D)  amends Section 7 of the Clayton Act by broadening the power to prevent corporate acquisitions where the acquisition may have a substantially adverse effect on competition. 
E)  requires large companies to notify the government of their intent to merge. 
A)  prohibits unfair and deceptive acts and practices regardless of whether competition is injured. 
B)  establishes protection for trademarks. 
C)  defines price discrimination as unlawful (subject to certain defenses) and provides the FTC with the right to establish limits on quantity discounts. 
D)  amends Section 7 of the Clayton Act by broadening the power to prevent corporate acquisitions where the acquisition may have a substantially adverse effect on competition. 
E)  requires large companies to notify the government of their intent to merge.

Question 15

Some forms of deceptive advertising are considered legal.

Accepted Answer

A) True 
 B)False

Question 16

The _____ Act prevents the marketing and selling of harmful toys and dangerous products.

Accepted Answer

A)  Sherman 
B)  Federal Trade Commission 
C)  Mail Fraud 
D)  Child Safety 
E)  Fair Packaging and Labeling 
A)  Sherman 
B)  Federal Trade Commission 
C)  Mail Fraud 
D)  Child Safety 
E)  Fair Packaging and Labeling

Question 17

Truly one-way arrangements are illegal.

Accepted Answer

A) True 
 B)False

Question 18

Bait-and-switch advertising is a form of a deceptive sales practice.

Accepted Answer

A) True 
 B)False

Question 19

Dual distribution occurs when a manufacturer sells to independent retailers and also through its own retail outlets.

Accepted Answer

A) True 
 B)False

Question 20

The _____ Act requires companies to notify the government of their intent to merge.

Accepted Answer

A)  Sherman 
B)  Clayton 
C)  Federal Trade Commission 
D)  Robinson-Patman 
E)  Hart-Scott-Rodino 
A)  Sherman 
B)  Clayton 
C)  Federal Trade Commission 
D)  Robinson-Patman 
E)  Hart-Scott-Rodino

The Supreme Court ruled that a "rule of reason" standard should apply to fair trade agreements,weighing their anticompetitive effects against their benefits.

The Equal Credit Opportunity Act:

When Taco Bell requires its franchisees to purchase all their raw materials and supplies from the franchisor in order for the franchisor to maintain quality control,it is:

When a retailer represents merchandise as being made by a firm other than the true manufacturer,it is said to be engaged in:

A _____ agreement exists when the supplier offers the retailer the exclusive distribution of a merchandise line or product,and in return the retailer agrees not to handle competing brands.

Which of the following laws prohibit retailers from operating in certain locations and require building and sign specifications to be met?

Bait-and-switch advertising:

The _____ Act makes it a federal crime to defraud consumers through use of the mail.

_____ occurs when two retailers buy an identical amount of "like grade and quality" merchandise from the same supplier but pay different prices.

The Federal Trade Commission's main concern with deceptive advertising is not with the intent of the advertiser,but whether the consumer was misled by the advertising.

The courts have interpreted the "foreseeability" doctrine to suggest that retailers must be careful selecting which products they will sell and how they will sell these products.

Vertical price fixing is also referred to as resale price maintenance or "fair trade."

Attempts by a manufacturer to limit the geographical area in which a retailer may resell its products are called _____ restrictions.

The Celler-Kefauver Antimerger Act:

Some forms of deceptive advertising are considered legal.

The _____ Act prevents the marketing and selling of harmful toys and dangerous products.

Truly one-way arrangements are illegal.

Bait-and-switch advertising is a form of a deceptive sales practice.

Dual distribution occurs when a manufacturer sells to independent retailers and also through its own retail outlets.

The _____ Act requires companies to notify the government of their intent to merge.

Perspectives on Retailing

Retail Strategic Planning and Operations Management

Retail Customers

Evaluating the Competition in Retailing

Managing the Supply Chain

Market Selection and Retail Location Analysis

Managing a Retailer’s Finances

Merchandise Buying and Handling

Merchandise Pricing

Advertising and Promotion

Customer Service and Retail Selling

Store Layout and Design

Managing People

Filters

Exam 6: Legal and Ethical Behavior

The Supreme Court ruled that a "rule of reason" standard should apply to fair trade agreements,weighing their anticompetitive effects against their benefits.

The Equal Credit Opportunity Act:

When Taco Bell requires its franchisees to purchase all their raw materials and supplies from the franchisor in order for the franchisor to maintain quality control,it is:

When a retailer represents merchandise as being made by a firm other than the true manufacturer,it is said to be engaged in:

A _____ agreement exists when the supplier offers the retailer the exclusive distribution of a merchandise line or product,and in return the retailer agrees not to handle competing brands.

Which of the following laws prohibit retailers from operating in certain locations and require building and sign specifications to be met?

Bait-and-switch advertising:

The _____ Act makes it a federal crime to defraud consumers through use of the mail.

_____ occurs when two retailers buy an identical amount of "like grade and quality" merchandise from the same supplier but pay different prices.

The Federal Trade Commission's main concern with deceptive advertising is not with the intent of the advertiser,but whether the consumer was misled by the advertising.

The courts have interpreted the "foreseeability" doctrine to suggest that retailers must be careful selecting which products they will sell and how they will sell these products.

Vertical price fixing is also referred to as resale price maintenance or "fair trade."

Attempts by a manufacturer to limit the geographical area in which a retailer may resell its products are called _____ restrictions.

The Celler-Kefauver Antimerger Act:

Some forms of deceptive advertising are considered legal.

The _____ Act prevents the marketing and selling of harmful toys and dangerous products.

Truly one-way arrangements are illegal.

Bait-and-switch advertising is a form of a deceptive sales practice.

Dual distribution occurs when a manufacturer sells to independent retailers and also through its own retail outlets.

The _____ Act requires companies to notify the government of their intent to merge.

Perspectives on Retailing

Retail Strategic Planning and Operations Management

Retail Customers

Evaluating the Competition in Retailing

Managing the Supply Chain

Market Selection and Retail Location Analysis

Managing a Retailer’s Finances

Merchandise Buying and Handling

Merchandise Pricing

Advertising and Promotion

Customer Service and Retail Selling

Store Layout and Design

Managing People

Filters