Question 1

The ____ to the Food and Drug Act gave the FDA authority for the first time to approve drugs based on their proven effectiveness.

Accepted Answer

A)  Kefauver Amendment of 1962 
B)  Food, Drug and Cosmetics Amendment of 1964 
C)  Effectiveness Amendment of 1962 
D)  Madison Amendment of 1962 
E)  Drug Efficacy Amendment of 1964 
A)  Kefauver Amendment of 1962 
B)  Food, Drug and Cosmetics Amendment of 1964 
C)  Effectiveness Amendment of 1962 
D)  Madison Amendment of 1962 
E)  Drug Efficacy Amendment of 1964

Question 2

The Truth-in-Lending Act covers only certain classes of consumer credit transactions. For example, the:

Accepted Answer

A)  debtor must be a business organization 
B)  creditor may not be a business organization 
C)  creditor must be in the business of regularly granting credit 
D)  debtor must be a business organization and the creditor must be in the business of regularly granting credit 
E)  creditor may not be a business organization and the creditor must be in the business of regularly granting credit 
A)  debtor must be a business organization 
B)  creditor may not be a business organization 
C)  creditor must be in the business of regularly granting credit 
D)  debtor must be a business organization and the creditor must be in the business of regularly granting credit 
E)  creditor may not be a business organization and the creditor must be in the business of regularly granting credit

Question 3

The Food and Drug Administration does not have which of the following powers:

Accepted Answer

A)  to restrict false advertising of drugs 
B)  to inspect factories where drugs are manufactured 
C)  to set the levels of additives that may be used in food 
D)  to seize drugs that have been approved to be on the market 
E)  all of the other choices are FDA powers 
A)  to restrict false advertising of drugs 
B)  to inspect factories where drugs are manufactured 
C)  to set the levels of additives that may be used in food 
D)  to seize drugs that have been approved to be on the market 
E)  all of the other choices are FDA powers

Question 4

It costs about $25 million and takes an average of 3 years to develop one new drug and clear all FDA rules before marketing the product.

Accepted Answer

A) True 
 B)False

Question 5

A prescription drug is one that:

Accepted Answer

A)  has serious side effects 
B)  is expensive 
C)  requires insurance to purchase 
D)  may only be used with the permission of a physician 
E)  may be purchased by anyone 
A)  has serious side effects 
B)  is expensive 
C)  requires insurance to purchase 
D)  may only be used with the permission of a physician 
E)  may be purchased by anyone

Question 6

Which of the following does not conform to FDA standards for food labels:

Accepted Answer

A)  "fresh" means the food is raw or unprocessed 
B)  "light" means at least one-tenth fewer calories per serving than the regular serving 
C)  "low calorie" means the product has less than 40 calories per serving per 100 grams 
D)  "low fat" means the product has 3 grams or less of fat per 100 gram serving 
E)  all of the other choices are correct 
A)  "fresh" means the food is raw or unprocessed 
B)  "light" means at least one-tenth fewer calories per serving than the regular serving 
C)  "low calorie" means the product has less than 40 calories per serving per 100 grams 
D)  "low fat" means the product has 3 grams or less of fat per 100 gram serving 
E)  all of the other choices are correct

Question 7

The FTC test for unfairness does not include which of the following elements, as applied to business practice?

Accepted Answer

A)  it causes substantial harm to consumers 
B)  consumers cannot reasonably avoid the injury 
C)  consumers cannot sue the business because the losses per person are too small 
D)  the injury is harmful in its net effects 
E)  all of the other choices are required elements 
A)  it causes substantial harm to consumers 
B)  consumers cannot reasonably avoid the injury 
C)  consumers cannot sue the business because the losses per person are too small 
D)  the injury is harmful in its net effects 
E)  all of the other choices are required elements

Question 8

The Fair Debt Collection Practices Act prohibits the following by debt collectors except:

Accepted Answer

A)  harassing, late-night phone calls 
B)  sending repeated letters demanding payment 
C)  publication of a list of debts owed 
D)  threatening violence if a debt is not paid 
E)  all of the other choices are prohibited 
A)  harassing, late-night phone calls 
B)  sending repeated letters demanding payment 
C)  publication of a list of debts owed 
D)  threatening violence if a debt is not paid 
E)  all of the other choices are prohibited

Question 9

The Truth-in-Lending Act:

Accepted Answer

A)  is intended to help married women establish credit history 
B)  is intended to eliminate credit discrimination on the basis of sex, race, color, religion, and other characteristics set forth in the Act 
C)  encourages competition in financing consumer credit 
D)  restricts interest rates creditors may charge consumers 
E)  all of the other choices 
A)  is intended to help married women establish credit history 
B)  is intended to eliminate credit discrimination on the basis of sex, race, color, religion, and other characteristics set forth in the Act 
C)  encourages competition in financing consumer credit 
D)  restricts interest rates creditors may charge consumers 
E)  all of the other choices

Question 10

The "R-value Rule" states that refrigerator makers must clearly explain to consumers what kind of insulation is used in their products.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following items is not required to be disclosed by a creditor as a part of the statement given a debtor?

Accepted Answer

A)  service, activity, carrying and transaction charges 
B)  loan fees and points 
C)  fees for credit reports and appraisals in non-real estate transactions 
D)  charges for credit life and credit accident and health insurance 
E)  all of the other choices are required to be disclosed 
A)  service, activity, carrying and transaction charges 
B)  loan fees and points 
C)  fees for credit reports and appraisals in non-real estate transactions 
D)  charges for credit life and credit accident and health insurance 
E)  all of the other choices are required to be disclosed

Question 12

Which of the following is not required to be listed on nutrition labels by the FDA because there is no shortage of it in American diets:

Accepted Answer

A)  sodium 
B)  thiamin 
C)  vitamin A 
D)  vitamin C 
E)  none of the other choices are correct 
A)  sodium 
B)  thiamin 
C)  vitamin A 
D)  vitamin C 
E)  none of the other choices are correct

Question 13

The Fair Credit Billing Act:

Accepted Answer

A)  prohibits the mailing of unsolicited credit cards 
B)  holds that if a consumer notifies a credit card company in a timely fashion that a card has been stolen there is no liability for unauthorized charges 
C)  holds that a consumer must pay credit card companies the disputed amount but disputes must be resolved in 180 days 
D)  prohibits the mailing of unsolicited credit cards and holds that if a consumer notifies a credit card company in a timely fashion that a card has been stolen there is no liability for unauthorized charges 
E)  none of the other choices 
A)  prohibits the mailing of unsolicited credit cards 
B)  holds that if a consumer notifies a credit card company in a timely fashion that a card has been stolen there is no liability for unauthorized charges 
C)  holds that a consumer must pay credit card companies the disputed amount but disputes must be resolved in 180 days 
D)  prohibits the mailing of unsolicited credit cards and holds that if a consumer notifies a credit card company in a timely fashion that a card has been stolen there is no liability for unauthorized charges 
E)  none of the other choices

Question 14

Fact Pattern 19-2
Jayme's Best produced a new line of pasta sauce (Herbal Health), intending for it to have extra nutritional benefits. Using the freshest ingredients, Jayme's added special herbs to the tomato paste and spices, as the herbs are believed by some Tibetan monks to have the power to prevent cancer. Jayme's marketed the sauce in grocery stores and health food stores. Jayme's advertisements said that Herbal Health may help prevent cancer and taste a lot better than the competition. Based on these facts, answer the following questions.
-Refer to Fact Pattern 19-2. If Jayme's sauce is found to contain a contaminant that makes people sick, the most the Food and Drug Administration can do to try to protect the public is:

Accepted Answer

A)  nothing; such matters are for consumers to resolve in tort law. 
B)  report the matter to the media to spread the word not the eat the sauce. 
C)  file a motion in federal court requesting that the agency be allowed to inspect the plants immediately. 
D)  seize the sauce to stop it from being sold. 
E)  impose heavy fines on Jayme's for violating safety standards. 
A)  nothing; such matters are for consumers to resolve in tort law. 
B)  report the matter to the media to spread the word not the eat the sauce. 
C)  file a motion in federal court requesting that the agency be allowed to inspect the plants immediately. 
D)  seize the sauce to stop it from being sold. 
E)  impose heavy fines on Jayme's for violating safety standards.

Question 15

A woman applies for credit from a department store. Which of the following information is legal for the department store to consider in deciding if it should give credit?

Accepted Answer

A)  that her former husband ran up a large unpaid bills 
B)  that she is pregnant 
C)  that she receives Food Stamps 
D)  that she had six credit cards canceled for non-payment 
E)  all of the other choices are illegal to consider 
A)  that her former husband ran up a large unpaid bills 
B)  that she is pregnant 
C)  that she receives Food Stamps 
D)  that she had six credit cards canceled for non-payment 
E)  all of the other choices are illegal to consider

Question 16

Which of the following is not required to be listed on nutrition labels by the FDA because there is no shortage of it in American diets:

Accepted Answer

A)  sodium 
B)  niacin 
C)  vitamin A 
D)  vitamin C 
E)  none of the other choices are correct 
A)  sodium 
B)  niacin 
C)  vitamin A 
D)  vitamin C 
E)  none of the other choices are correct

Question 17

Debt collectors who violate the Fair Debt Collection Practices Act may be liable for double the actual damages plus additional damages up to $50,000.

Accepted Answer

A) True 
 B)False

Question 18

Comparing regulation of drugs to other countries, the U.S. is:

Accepted Answer

A)  not very strict compared to nations of Europe 
B)  not very strict compared to most underdeveloped nations 
C)  one of the strictest nations but has little impact on the world market 
D)  one of the strictest nations and has great impact on the world market 
E)  none of the other choices 
A)  not very strict compared to nations of Europe 
B)  not very strict compared to most underdeveloped nations 
C)  one of the strictest nations but has little impact on the world market 
D)  one of the strictest nations and has great impact on the world market 
E)  none of the other choices

Question 19

Under the Consumer Leasing Act, which of the following must be given before a consumer becomes obligated under a lease?

Accepted Answer

A)  the identity of the party responsible for maintaining the property 
B)  the name of the leaser's agent who is authorized to sign the lease 
C)  the name of the leaser's bank 
D)  the address and relation of the leaser's credit agency 
E)  all of the other choices must be provided 
A)  the identity of the party responsible for maintaining the property 
B)  the name of the leaser's agent who is authorized to sign the lease 
C)  the name of the leaser's bank 
D)  the address and relation of the leaser's credit agency 
E)  all of the other choices must be provided

Question 20

Fact Pattern 19-2
Jayme's Best produced a new line of pasta sauce (Herbal Health), intending for it to have extra nutritional benefits. Using the freshest ingredients, Jayme's added special herbs to the tomato paste and spices, as the herbs are believed by some Tibetan monks to have the power to prevent cancer. Jayme's marketed the sauce in grocery stores and health food stores. Jayme's advertisements said that Herbal Health may help prevent cancer and taste a lot better than the competition. Based on these facts, answer the following questions.
-Refer to Fact Pattern 19-2. If Herbal Health contains food additives it must meet certain safety standards. These standards call for:

Accepted Answer

A)  zero risk from additives (no chance of cancer). 
B)  reasonable certainty of no harm (one in a million lifetime chance of cancer). 
C)  de minimus level of harm (one in ten-thousand lifetime chance of cancer). 
D)  acceptable risk of harm (one in one-thousand lifetime chance of cancer). 
E)  natural substances, such as herbs, are not regulated food additives. 
A)  zero risk from additives (no chance of cancer). 
B)  reasonable certainty of no harm (one in a million lifetime chance of cancer). 
C)  de minimus level of harm (one in ten-thousand lifetime chance of cancer). 
D)  acceptable risk of harm (one in one-thousand lifetime chance of cancer). 
E)  natural substances, such as herbs, are not regulated food additives.

The ____ to the Food and Drug Act gave the FDA authority for the first time to approve drugs based on their proven effectiveness.

The Truth-in-Lending Act covers only certain classes of consumer credit transactions. For example, the:

The Food and Drug Administration does not have which of the following powers:

It costs about $25 million and takes an average of 3 years to develop one new drug and clear all FDA rules before marketing the product.

A prescription drug is one that:

Which of the following does not conform to FDA standards for food labels:

The FTC test for unfairness does not include which of the following elements, as applied to business practice?

The Fair Debt Collection Practices Act prohibits the following by debt collectors except:

The Truth-in-Lending Act:

The "R-value Rule" states that refrigerator makers must clearly explain to consumers what kind of insulation is used in their products.

Which of the following items is not required to be disclosed by a creditor as a part of the statement given a debtor?

Which of the following is not required to be listed on nutrition labels by the FDA because there is no shortage of it in American diets:

The Fair Credit Billing Act:

A woman applies for credit from a department store. Which of the following information is legal for the department store to consider in deciding if it should give credit?

Which of the following is not required to be listed on nutrition labels by the FDA because there is no shortage of it in American diets:

Debt collectors who violate the Fair Debt Collection Practices Act may be liable for double the actual damages plus additional damages up to $50,000.

Comparing regulation of drugs to other countries, the U.S. is:

Under the Consumer Leasing Act, which of the following must be given before a consumer becomes obligated under a lease?

Todays Business Environment: Law and Ethics

The Court Systems

Trials and Resolving Disputes

The Constitution: Focus on Application to Business

Criminal Law and Business

Elements of Torts

Business Torts and Product Liability

Real and Personal Property

Intellectual Property

Contracts

Domestic and International Sales

Business Organizations

Negotiable Instruments, Credit, and Bankruptcy

Agency and the Employment Relationship

Employment and Labor Regulations

Employment Discrimination

The Regulatory Process

Securities Regulation

Antitrust Law

Environmental Law

The International Legal Environment of Business

Filters

Exam 19: Consumer Protection

The ____ to the Food and Drug Act gave the FDA authority for the first time to approve drugs based on their proven effectiveness.

The Truth-in-Lending Act covers only certain classes of consumer credit transactions. For example, the:

The Food and Drug Administration does not have which of the following powers:

It costs about $25 million and takes an average of 3 years to develop one new drug and clear all FDA rules before marketing the product.

A prescription drug is one that:

Which of the following does not conform to FDA standards for food labels:

The FTC test for unfairness does not include which of the following elements, as applied to business practice?

The Fair Debt Collection Practices Act prohibits the following by debt collectors except:

The Truth-in-Lending Act:

The "R-value Rule" states that refrigerator makers must clearly explain to consumers what kind of insulation is used in their products.

Which of the following items is not required to be disclosed by a creditor as a part of the statement given a debtor?

Which of the following is not required to be listed on nutrition labels by the FDA because there is no shortage of it in American diets:

The Fair Credit Billing Act:

A woman applies for credit from a department store. Which of the following information is legal for the department store to consider in deciding if it should give credit?

Which of the following is not required to be listed on nutrition labels by the FDA because there is no shortage of it in American diets:

Debt collectors who violate the Fair Debt Collection Practices Act may be liable for double the actual damages plus additional damages up to $50,000.

Comparing regulation of drugs to other countries, the U.S. is:

Under the Consumer Leasing Act, which of the following must be given before a consumer becomes obligated under a lease?

Todays Business Environment: Law and Ethics

The Court Systems

Trials and Resolving Disputes

The Constitution: Focus on Application to Business

Criminal Law and Business

Elements of Torts

Business Torts and Product Liability

Real and Personal Property

Intellectual Property

Contracts

Domestic and International Sales

Business Organizations

Negotiable Instruments, Credit, and Bankruptcy

Agency and the Employment Relationship

Employment and Labor Regulations

Employment Discrimination

The Regulatory Process

Securities Regulation

Antitrust Law

Environmental Law

The International Legal Environment of Business

Filters