Question 1

When the Consumer Credit Protection Act was passed in 1968 there was about $100 billion worth of consumer credit outstanding; not the figure is about:

Accepted Answer

A)  $200 billion 
B)  $300 billion 
C)  $1 trillion 
D)  $2.5 trillion 
E)  $5 trillion 
A)  $200 billion 
B)  $300 billion 
C)  $1 trillion 
D)  $2.5 trillion 
E)  $5 trillion

Question 2

When the FTC tried to sue a company for scams advertised on the Internet:

Accepted Answer

A)  it was treated the same as other deceptive sales; fines were paid 
B)  the appeals court held that there could be no suit because of First Amendment rights 
C)  the appeals court held that there could be no suit because jurisdiction over the Internet belongs to the Federal Communications Commission, not the FTC 
D)  the appeals court held that there could be no suit because this exceeded the powers of the agency; Congress would have to amend the FTC Act 
E)  none of the other choices 
A)  it was treated the same as other deceptive sales; fines were paid 
B)  the appeals court held that there could be no suit because of First Amendment rights 
C)  the appeals court held that there could be no suit because jurisdiction over the Internet belongs to the Federal Communications Commission, not the FTC 
D)  the appeals court held that there could be no suit because this exceeded the powers of the agency; Congress would have to amend the FTC Act 
E)  none of the other choices

Question 3

A soup company once a television ad for a soup in which marbles were put in the bottom of the soup bowl to make the chunky stuff in the soup be near the top. This ad was:

Accepted Answer

A)  illegal in the U.S. and probably illegal in most advanced European nations and in Japan 
B)  legal in the U.S., but probably illegal as being deceptive in much of Europe and in Japan 
C)  legal in the U.S. and would probably be legal in most of Europe and in Japan since it does not injure consumers 
D)  legal everywhere if approved by the World Trade Organization 
E)  none of the other choices 
A)  illegal in the U.S. and probably illegal in most advanced European nations and in Japan 
B)  legal in the U.S., but probably illegal as being deceptive in much of Europe and in Japan 
C)  legal in the U.S. and would probably be legal in most of Europe and in Japan since it does not injure consumers 
D)  legal everywhere if approved by the World Trade Organization 
E)  none of the other choices

Question 4

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

Accepted Answer

A)  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 
B)  the color of the car 
C)  a statement that the consumer need not ask for an independent inspection of the car 
D)  all of the other specific choices are required 
E)  none of the other specific choices are required 
A)  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 
B)  the color of the car 
C)  a statement that the consumer need not ask for an independent inspection of the car 
D)  all of the other specific choices are required 
E)  none of the other specific choices are required

Question 5

Which of the following is a prohibited basis under the Equal Credit Opportunity Act:

Accepted Answer

A)  race 
B)  sex 
C)  age 
D)  religion 
E)  all of the other specific choices are correct 
A)  race 
B)  sex 
C)  age 
D)  religion 
E)  all of the other specific choices are correct

Question 6

The FTC may sue a company for an unfair act that is not deceptive.

Accepted Answer

A) True 
 B)False

Question 7

FTC staff members propose complaints to:

Accepted Answer

A)  five executives 
B)  ten commissioners 
C)  five commissioners 
D)  district courts 
E)  the U.S. Supreme Court 
A)  five executives 
B)  ten commissioners 
C)  five commissioners 
D)  district courts 
E)  the U.S. Supreme Court

Question 8

One reason foreign countries adopt FDA standards for drug production is that they want to:

Accepted Answer

A)  export their products to the U.S. 
B)  export their products to the EU countries 
C)  import drugs from the U.S. 
D)  maintain a reputation for low-cost drugs 
E)  export their products to the EU countries and import drugs from the U.S. 
A)  export their products to the U.S. 
B)  export their products to the EU countries 
C)  import drugs from the U.S. 
D)  maintain a reputation for low-cost drugs 
E)  export their products to the EU countries and import drugs from the U.S.

Question 9

Debt collectors who violate the Fair Debt Collection Practices Act may be liable for damages specified in the statute, but not liable for damages in tort.

Accepted Answer

A) True 
 B)False

Question 10

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 the herbs put in Jayme's sauce are determined to be a drug that should be regulated, then before the sauce can be sold, the FDA will have to be sure that the herbs, which are supposed to stop cancer, are:

Accepted Answer

A)  safe for human consumption 
B)  effective at preventing cancer 
C)  something that should be sold over the counter or by prescription only 
D)  safe for human consumption and something that should be sold over the counter or by prescription only 
E)  safe for human consumption and something that should be sold over the counter or by prescription only and effective at preventing cancer 
A)  safe for human consumption 
B)  effective at preventing cancer 
C)  something that should be sold over the counter or by prescription only 
D)  safe for human consumption and something that should be sold over the counter or by prescription only 
E)  safe for human consumption and something that should be sold over the counter or by prescription only and effective at preventing cancer

Question 11

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)  the color of the car 
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)  the color of the car

Question 12

The Food and Drug Administration:

Accepted Answer

A)  inspects drug manufacturing facilities 
B)  prohibits the sale of drugs without FDA approval 
C)  prohibits the sale of prescription drugs to anyone under age 19 without parental consent 
D)  inspects drug manufacturing facilities and prohibits the sale of drugs without FDA approval 
E)  inspects drug manufacturing facilities and prohibits the sale of drugs without FDA approval and prohibits the sale of prescription drugs to anyone under age 19 without parental consent 
A)  inspects drug manufacturing facilities 
B)  prohibits the sale of drugs without FDA approval 
C)  prohibits the sale of prescription drugs to anyone under age 19 without parental consent 
D)  inspects drug manufacturing facilities and prohibits the sale of drugs without FDA approval 
E)  inspects drug manufacturing facilities and prohibits the sale of drugs without FDA approval and prohibits the sale of prescription drugs to anyone under age 19 without parental consent

Question 13

The Food, Drug and Cosmetic Act of 1938 expanded the FDA's powers to include the power to allow it to do which of the following:

Accepted Answer

A)  prohibit false advertising of drugs 
B)  regulate costs of essential food items 
C)  require quotas of essential food items to be produced 
D)  require quotas of essential drugs to be produced 
E)  all of the other specific choices are correct 
A)  prohibit false advertising of drugs 
B)  regulate costs of essential food items 
C)  require quotas of essential food items to be produced 
D)  require quotas of essential drugs to be produced 
E)  all of the other specific choices are correct

Question 14

Making illegal copies of patented drugs is a serious problem for public health around the world.

Accepted Answer

A) True 
 B)False

Question 15

The FDA began issuing regulations for nutrition labeling in:

Accepted Answer

A)  1909 
B)  1940 
C)  1970 
D)  1973 
E)  1990 
A)  1909 
B)  1940 
C)  1970 
D)  1973 
E)  1990

Question 16

The Fair and Accurate Credit Transactions Act (FACT Act) requires credit reporting services to let consumers correct bad information in their credit reports.

Accepted Answer

A) True 
 B)False

Question 17

The Food Quality Protection Act's definition of "reasonable certainty of no harm" means that there is ____ from any source that affects foods, raw or processed.

Accepted Answer

A)  no more than a one-in-a-million lifetime chance of cancer 
B)  no more than a one-in-ten lifetime chance of cancer 
C)  no chance of cancer under any circumstances 
D)  a minimal chance of cancer for otherwise healthy people 
E)  none of the other choices are correct 
A)  no more than a one-in-a-million lifetime chance of cancer 
B)  no more than a one-in-ten lifetime chance of cancer 
C)  no chance of cancer under any circumstances 
D)  a minimal chance of cancer for otherwise healthy people 
E)  none of the other choices are correct

Question 18

The Food, Drug and Cosmetic Act of 1938 expanded the powers of the FDA to include:

Accepted Answer

A)  the ability to set safe levels of additives in foods 
B)  new enforcement powers 
C)  prohibiting false advertising of drugs 
D)  inspection of drug producers 
E)  all of the other choices 
A)  the ability to set safe levels of additives in foods 
B)  new enforcement powers 
C)  prohibiting false advertising of drugs 
D)  inspection of drug producers 
E)  all of the other choices

Question 19

The ____ shields drug manufacturers from liability in cases where doctors misuse drugs.

Accepted Answer

A)  physician intermediary doctrine 
B)  medical intermediary doctrine 
C)  misuse doctrine 
D)  professional intermediary doctrine 
E)  none of the other choices are correct 
A)  physician intermediary doctrine 
B)  medical intermediary doctrine 
C)  misuse doctrine 
D)  professional intermediary doctrine 
E)  none of the other choices are correct

Question 20

The Food Additives Amendment (Delaney Clause) to the Food, Drug, and Cosmetic Act was replaced by the Food Quality Protection Act in 1996 because the Delaney Clause:

Accepted Answer

A)  was not strict enough 
B)  was too strict 
C)  only applied to food and drug producers contracting with the government 
D)  did not apply to food and drug producers contracting with the government 
E)  did not bring about the economic growth it was expected to spark 
A)  was not strict enough 
B)  was too strict 
C)  only applied to food and drug producers contracting with the government 
D)  did not apply to food and drug producers contracting with the government 
E)  did not bring about the economic growth it was expected to spark

Exam 19: Consumer Protection

When the Consumer Credit Protection Act was passed in 1968 there was about $100 billion worth of consumer credit outstanding; not the figure is about:

When the FTC tried to sue a company for scams advertised on the Internet:

A soup company once a television ad for a soup in which marbles were put in the bottom of the soup bowl to make the chunky stuff in the soup be near the top. This ad was:

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

Which of the following is a prohibited basis under the Equal Credit Opportunity Act:

The FTC may sue a company for an unfair act that is not deceptive.

FTC staff members propose complaints to:

One reason foreign countries adopt FDA standards for drug production is that they want to:

Debt collectors who violate the Fair Debt Collection Practices Act may be liable for damages specified in the statute, but not liable for damages in tort.

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

The Food and Drug Administration:

The Food, Drug and Cosmetic Act of 1938 expanded the FDA's powers to include the power to allow it to do which of the following:

Making illegal copies of patented drugs is a serious problem for public health around the world.

The FDA began issuing regulations for nutrition labeling in:

The Fair and Accurate Credit Transactions Act (FACT Act) requires credit reporting services to let consumers correct bad information in their credit reports.

The Food Quality Protection Act's definition of "reasonable certainty of no harm" means that there is ____ from any source that affects foods, raw or processed.

The Food, Drug and Cosmetic Act of 1938 expanded the powers of the FDA to include:

The ____ shields drug manufacturers from liability in cases where doctors misuse drugs.

The Food Additives Amendment (Delaney Clause) to the Food, Drug, and Cosmetic Act was replaced by the Food Quality Protection Act in 1996 because the Delaney Clause:

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