Question 1

If a person is injured by a drug because a physician gives an improper dose, the maker may be protected from liability under the "learned intermediary" doctrine.

Accepted Answer

A) True 
 B)False

Question 2

Under the FTC's Used Car Rule the Buyer's Guide must contain:

Accepted Answer

A)  a statement of the terms of any warranty offered with the car 
B)  prominent statement of whether the dealer is selling the car "as is" and, if so, that the consumer must pay for any repairs needed after buying the car 
C)  warning that oral promises are difficult to enforce, with a suggestion to get all promises in writing 
D)  a suggestion that the consumer ask for an independent inspection of the car 
E)  all of the other choices are required 
A)  a statement of the terms of any warranty offered with the car 
B)  prominent statement of whether the dealer is selling the car "as is" and, if so, that the consumer must pay for any repairs needed after buying the car 
C)  warning that oral promises are difficult to enforce, with a suggestion to get all promises in writing 
D)  a suggestion that the consumer ask for an independent inspection of the car 
E)  all of the other choices are required

Question 3

The Truth-in-Lending Act does not apply to consumer credit transactions over $25,000; except for real estate.

Accepted Answer

A) True 
 B)False

Question 4

Under the FTC's Used Car Rule the Buyer's Guide need NOT contain:

Accepted Answer

A)  a statement of the terms of any warranty offered with the car 
B)  prominent statement of whether the dealer is selling the car "as is" and, if so, that the consumer must pay for any repairs needed after buying the car 
C)  warning that oral promises are difficult to enforce, with a suggestion to get all promises in writing 
D)  a suggestion that the consumer ask for an independent inspection of the car 
E)  all of the other choices are required 
A)  a statement of the terms of any warranty offered with the car 
B)  prominent statement of whether the dealer is selling the car "as is" and, if so, that the consumer must pay for any repairs needed after buying the car 
C)  warning that oral promises are difficult to enforce, with a suggestion to get all promises in writing 
D)  a suggestion that the consumer ask for an independent inspection of the car 
E)  all of the other choices are required

Question 5

The Federal Trade Commission regulates:

Accepted Answer

A)  deceptive business practices 
B)  false advertising claims 
C)  unfair business practices 
D)  deceptive business practices and false advertising claims 
E)  deceptive business practices and false advertising claims and unfair business practices 
A)  deceptive business practices 
B)  false advertising claims 
C)  unfair business practices 
D)  deceptive business practices and false advertising claims 
E)  deceptive business practices and false advertising claims and unfair business practices

Question 6

"Buffo will cure your headache" the ad reads. Buffo, like other pain relievers, helps most people feel better, but it does not cure headaches, it just helps hide the pain, and it does not prevent future headaches. Under the FTC deceptive advertising standard, this ad is:

Accepted Answer

A)  not deceptive because most people understand how medicine like Buffo works 
B)  not deceptive only if the company can document that Buffo in fact does cure headaches 
C)  deceptive because products involving medicines must have very accurate ads 
D)  deceptive because it will mislead reasonable consumers as to the true nature of the product 
E)  none of the other choices 
A)  not deceptive because most people understand how medicine like Buffo works 
B)  not deceptive only if the company can document that Buffo in fact does cure headaches 
C)  deceptive because products involving medicines must have very accurate ads 
D)  deceptive because it will mislead reasonable consumers as to the true nature of the product 
E)  none of the other choices

Question 7

The Food, Drug and Cosmetics Act was passed in 1938 after:

Accepted Answer

A)  a large outbreak of food poisoning 
B)  a large numbers of women suffered adverse reactions to a drug-store brand of face cream 
C)  the drug companies requested an increase of regulation 
D)  several people in Ohio died after eating an infected batch of ground beef 
E)  none of the other choices 
A)  a large outbreak of food poisoning 
B)  a large numbers of women suffered adverse reactions to a drug-store brand of face cream 
C)  the drug companies requested an increase of regulation 
D)  several people in Ohio died after eating an infected batch of ground beef 
E)  none of the other choices

Question 8

If a credit reporting agency is found to have violated the rights of a consumer, damages may not exceed $25,000.

Accepted Answer

A) True 
 B)False

Question 9

The Truth-in-Lending Act does not apply to consumer real estate purchases financed by a mortgage.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A)  harassing, late-night phone calls 
B)  discussing a debt with neighbors 
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)  discussing a debt with neighbors 
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 11

Which of the following must be listed per serving portion on nutrition labels:

Accepted Answer

A)  total calories and calories from fat 
B)  cholesterol 
C)  iron 
D)  protein 
E)  all of the other specific choices must be listed 
A)  total calories and calories from fat 
B)  cholesterol 
C)  iron 
D)  protein 
E)  all of the other specific choices must be listed

Question 12

A "trade regulation rule" issued by the FTC that applies to a specific business practice sets a standard:

Accepted Answer

A)  that everyone in the industry must follow or be subject to criminal conviction 
B)  must be agreed upon by a majority of the members of the industry to become law 
C)  after a violation is proven the FTC can close down the violator's business 
D)  is voluntary but provides quality guidance for the industry 
E)  none of the other choices 
A)  that everyone in the industry must follow or be subject to criminal conviction 
B)  must be agreed upon by a majority of the members of the industry to become law 
C)  after a violation is proven the FTC can close down the violator's business 
D)  is voluntary but provides quality guidance for the industry 
E)  none of the other choices

Question 13

The Truth-in-Lending Act does NOT apply to which of the following:

Accepted Answer

A)  a $5,000 loan to a friend 
B)  a $25,000 loan to a friend 
C)  a transaction with no finance charge and fewer than 4 installment payments 
D)  a consumer credit transaction of $30,000 that does not involve real estate 
E)  all of the other choices are correct 
A)  a $5,000 loan to a friend 
B)  a $25,000 loan to a friend 
C)  a transaction with no finance charge and fewer than 4 installment payments 
D)  a consumer credit transaction of $30,000 that does not involve real estate 
E)  all of the other choices are correct

Question 14

The FDA seized shipments of orange juice that were not properly labeled.

Accepted Answer

A) True 
 B)False

Question 15

The Food, Drug and Cosmetic Act of 1938 gave the FDA broad powers to regulate food production and prohibit false advertising of drugs.

Accepted Answer

A) True 
 B)False

Question 16

Under the Electronic Fund Transfer Act, financial institutions have ____ to resolve disputes in customers' monthly statements.

Accepted Answer

A)  7 days 
B)  30 days 
C)  45 days 
D)  120 days 
E)  6 months 
A)  7 days 
B)  30 days 
C)  45 days 
D)  120 days 
E)  6 months

Question 17

The Consumer Leasing Act does for consumer leases what the Fair Credit Billing Act does for consumer credit.

Accepted Answer

A) True 
 B)False

Question 18

Congress enacted a major financial reform bill in 2010, popularly known as:

Accepted Answer

A)  the Dodd-Frank Act 
B)  the Wall Street Act 
C)  the Financial Crisis Act 
D)  the Business Regulation Act 
E)  the Patriot Act 
A)  the Dodd-Frank Act 
B)  the Wall Street Act 
C)  the Financial Crisis Act 
D)  the Business Regulation Act 
E)  the Patriot Act

Question 19

The Dodd-Frank Act requires that credit card interest rates be no more than four percentage points greater than the Federal Reserve Board prime rate.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is an example of a class III medical device:

Accepted Answer

A)  bandages 
B)  wheelchairs 
C)  x-ray machines 
D)  surgical materials 
E)  pacemakers 
A)  bandages 
B)  wheelchairs 
C)  x-ray machines 
D)  surgical materials 
E)  pacemakers

Exam 19: Consumer Protection

If a person is injured by a drug because a physician gives an improper dose, the maker may be protected from liability under the "learned intermediary" doctrine.

Under the FTC's Used Car Rule the Buyer's Guide must contain:

The Truth-in-Lending Act does not apply to consumer credit transactions over $25,000; except for real estate.

Under the FTC's Used Car Rule the Buyer's Guide need NOT contain:

The Federal Trade Commission regulates:

"Buffo will cure your headache" the ad reads. Buffo, like other pain relievers, helps most people feel better, but it does not cure headaches, it just helps hide the pain, and it does not prevent future headaches. Under the FTC deceptive advertising standard, this ad is:

The Food, Drug and Cosmetics Act was passed in 1938 after:

If a credit reporting agency is found to have violated the rights of a consumer, damages may not exceed $25,000.

The Truth-in-Lending Act does not apply to consumer real estate purchases financed by a mortgage.

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

Which of the following must be listed per serving portion on nutrition labels:

A "trade regulation rule" issued by the FTC that applies to a specific business practice sets a standard:

The Truth-in-Lending Act does NOT apply to which of the following:

The FDA seized shipments of orange juice that were not properly labeled.

The Food, Drug and Cosmetic Act of 1938 gave the FDA broad powers to regulate food production and prohibit false advertising of drugs.

Under the Electronic Fund Transfer Act, financial institutions have ____ to resolve disputes in customers' monthly statements.

The Consumer Leasing Act does for consumer leases what the Fair Credit Billing Act does for consumer credit.

Congress enacted a major financial reform bill in 2010, popularly known as:

The Dodd-Frank Act requires that credit card interest rates be no more than four percentage points greater than the Federal Reserve Board prime rate.

Which of the following is an example of a class III medical device:

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

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