Question 1

The Pure Food and Drug Act of 1906 was the first regulation of food and drugs. What sparked interest in this concern?

Accepted Answer

A)  studies by a government chemist showed some food preservatives were harmful to humans 
B)  publication of Upton Sinclair's book The Jungle 
C)  deaths in the Spanish-American War from impure food 
D)  publication of Upton Sinclair's book The Jungle and deaths in the Spanish-American War from impure food 
E)  publication of Upton Sinclair's book The Jungle and deaths in the Spanish-American War from impure food and studies by a government chemist showed some food preservatives were harmful to humans 
A)  studies by a government chemist showed some food preservatives were harmful to humans 
B)  publication of Upton Sinclair's book The Jungle 
C)  deaths in the Spanish-American War from impure food 
D)  publication of Upton Sinclair's book The Jungle and deaths in the Spanish-American War from impure food 
E)  publication of Upton Sinclair's book The Jungle and deaths in the Spanish-American War from impure food and studies by a government chemist showed some food preservatives were harmful to humans

Question 2

Trade regulation rules tend to be issued in areas where the FTC thinks there are particular problems with deception.

Accepted Answer

A) True 
 B)False

Question 3

Medical devices approved by the FDA before being sold and then monitored for problems.

Accepted Answer

A) True 
 B)False

Question 4

When the Consumer Credit Protection Act was passed in 1968 there was about ____ worth of consumer credit outstanding.

Accepted Answer

A)  $100 billion 
B)  $300 billion 
C)  $1 trillion 
D)  $2.5 trillion 
E)  $5 trillion 
A)  $100 billion 
B)  $300 billion 
C)  $1 trillion 
D)  $2.5 trillion 
E)  $5 trillion

Question 5

____ is a regulation written by the Federal Reserve Board specifying items that must be listed as part of consumer finance charges under the Truth-in-Lending Act.

Accepted Answer

A)  Regulation C 
B)  Regulation X 
C)  Regulation T 
D)  Regulation Z 
E)  none of the other choices 
A)  Regulation C 
B)  Regulation X 
C)  Regulation T 
D)  Regulation Z 
E)  none of the other choices

Question 6

If you lose the bank card you use to withdraw cash from your bank by machine, and you report it to the bank within two days, you are liable for how much in losses?

Accepted Answer

A)  $0 
B)  $500 
C)  $5,000 
D)  however much is in your account 
E)  none of the other choices 
A)  $0 
B)  $500 
C)  $5,000 
D)  however much is in your account 
E)  none of the other choices

Question 7

A possible benefit of drug regulations in place in many European nations is that:

Accepted Answer

A)  new drugs are introduced to the market more quickly 
B)  many more drugs may be purchased without a prescription 
C)  companies wishing to sell in Europe do not need be licensed in each individual country 
D)  pharmaceutical may be less expensive because companies spend less time getting through administrative hurdles 
E)  all of the other choices may be benefits of the European system 
A)  new drugs are introduced to the market more quickly 
B)  many more drugs may be purchased without a prescription 
C)  companies wishing to sell in Europe do not need be licensed in each individual country 
D)  pharmaceutical may be less expensive because companies spend less time getting through administrative hurdles 
E)  all of the other choices may be benefits of the European system

Question 8

Which of the following is not a function of the Food and Drug Administration?

Accepted Answer

A)  restaurant sanitation inspections 
B)  drug evaluation studies 
C)  food additives studies 
D)  study of veterinary products 
E)  all of the other choices are functions of the FDA 
A)  restaurant sanitation inspections 
B)  drug evaluation studies 
C)  food additives studies 
D)  study of veterinary products 
E)  all of the other choices are functions of the FDA

Question 9

The intent of the Nutrition Labeling and Education Act is to:

Accepted Answer

A)  make people eat healthier food 
B)  make people buy more packaged food 
C)  help consumers make informed purchases 
D)  prevent consumers from making informed purchases 
E)  help companies sell their food products 
A)  make people eat healthier food 
B)  make people buy more packaged food 
C)  help consumers make informed purchases 
D)  prevent consumers from making informed purchases 
E)  help companies sell their food products

Question 10

In Chuway v. National Action Financial Services, where Chuway received a letter from debt collector National that requested payment of the amount she owed on a debt, the appeals court held that the debt collector:

Accepted Answer

A)  violated the FDCPA by sending the plaintiff multiple letters after she requested they stop 
B)  violated the FDCPA by not clearly establishing the amount of the debt 
C)  did not violate the FDCPA because the language of the letter was clear 
D)  clearly used safe harbor language and so did not violate the FDCPA 
E)  used reasonable language for the situation and so did not violate the FDCPA 
A)  violated the FDCPA by sending the plaintiff multiple letters after she requested they stop 
B)  violated the FDCPA by not clearly establishing the amount of the debt 
C)  did not violate the FDCPA because the language of the letter was clear 
D)  clearly used safe harbor language and so did not violate the FDCPA 
E)  used reasonable language for the situation and so did not violate the FDCPA

Question 11

The government agency charged with monitoring food and drug safety is the:

Accepted Answer

A)  Food and Drug Administration 
B)  Food Safety Administration 
C)  Food and Drug Regulation Agency 
D)  Food and Dangerous Drug Administration 
E)  Consumable Products Administration 
A)  Food and Drug Administration 
B)  Food Safety Administration 
C)  Food and Drug Regulation Agency 
D)  Food and Dangerous Drug Administration 
E)  Consumable Products Administration

Question 12

Truth in lending refers to the requirement that creditors:

Accepted Answer

A)  must disclose all relevant terms in credit transactions 
B)  must not use sex or race to determine a person's creditworthiness 
C)  must not use abusive debt collection techniques 
D)  all of the other specific choices are correct 
E)  none of the other specific choices are correct 
A)  must disclose all relevant terms in credit transactions 
B)  must not use sex or race to determine a person's creditworthiness 
C)  must not use abusive debt collection techniques 
D)  all of the other specific choices are correct 
E)  none of the other specific choices are correct

Question 13

The FDA issues standards for nutrition labels on food.

Accepted Answer

A) True 
 B)False

Question 14

Which of these is most likely to be attacked by the FTC as a deceptive business practice?

Accepted Answer

A)  selling stock to investors in a company for three times its true value 
B)  charging 25% interest on consumer loans when the market rate of interest is 10% 
C)  selling original art to consumers at prices significantly above market value 
D)  telling consumers that a brand of jeans is special and selling them for double what other jeans sell for, when they are the same as other jeans except for the name 
E)  none of the other choices 
A)  selling stock to investors in a company for three times its true value 
B)  charging 25% interest on consumer loans when the market rate of interest is 10% 
C)  selling original art to consumers at prices significantly above market value 
D)  telling consumers that a brand of jeans is special and selling them for double what other jeans sell for, when they are the same as other jeans except for the name 
E)  none of the other choices

Question 15

In Schuchmann v. Air Services Heating and Air Conditioning a home owner bought a heating and A/C unit with a lifetime warranty. After five years the company refused to honor the warranty because it was too expensive. When the consumer sued, the courts held that:

Accepted Answer

A)  the FTC acted against the company on behalf of similarly affected consumers and won warranty enforcement for all such consumers 
B)  the company proved that its warranty was not "lifetime" as to ordinary maintenance, so the consumer's claim was rejected 
C)  the company was losing money on the warranty so, to prevent bankruptcy, could limit its liability to five year's coverage 
D)  the attorney general could sue on behalf of all similarly affected consumers in the state 
E)  none of the other choices 
A)  the FTC acted against the company on behalf of similarly affected consumers and won warranty enforcement for all such consumers 
B)  the company proved that its warranty was not "lifetime" as to ordinary maintenance, so the consumer's claim was rejected 
C)  the company was losing money on the warranty so, to prevent bankruptcy, could limit its liability to five year's coverage 
D)  the attorney general could sue on behalf of all similarly affected consumers in the state 
E)  none of the other choices

Question 16

In Wyeth v. Levine the Supreme Court held that FDA approval of the warning label on a drug did not mean the drug maker was not responsible for updating the label to include new relevant safety information.

Accepted Answer

A) True 
 B)False

Question 17

The Food, Drug and Cosmetic Act of 1938 did not expand the powers of the FDA to include:

Accepted Answer

A)  the ability to set safe levels of additives in foods 
B)  require nutrition labels on food 
C)  prohibiting false advertising of drugs 
D)  inspection of drug producers 
E)  new enforcement powers 
A)  the ability to set safe levels of additives in foods 
B)  require nutrition labels on food 
C)  prohibiting false advertising of drugs 
D)  inspection of drug producers 
E)  new enforcement powers

Question 18

The FTC uses the ____ to put its policy about advertising into effect:

Accepted Answer

A)  advertising monitoring program 
B)  advertising regulation program 
C)  legitimate advertising program 
D)  advertising decree program 
E)  none of the other choices are correct 
A)  advertising monitoring program 
B)  advertising regulation program 
C)  legitimate advertising program 
D)  advertising decree program 
E)  none of the other choices are correct

Question 19

The Food Quality Protection Act holds that a substance may be approved for use in food if:

Accepted Answer

A)  there is "no risk" 
B)  there is "no risk" it could induce cancer in humans 
C)  there is a "de minimus risk" of cancer in man or animals 
D)  there is a "reasonable certainty of no harm" 
E)  none of the other choices 
A)  there is "no risk" 
B)  there is "no risk" it could induce cancer in humans 
C)  there is a "de minimus risk" of cancer in man or animals 
D)  there is a "reasonable certainty of no harm" 
E)  none of the other choices

Question 20

What is not a feature of the Consumer Credit Protection Act:

Accepted Answer

A)  abusive debt collection tactics are limited 
B)  credit reporting agencies must follow certain rules about accuracy in consumer reports 
C)  creditors must follow certain procedures for handling charges disputed by consumers 
D)  creditors may not charge interest rates that exceed the federal maximum rates 
E)  all of the other choices are features of the Act 
A)  abusive debt collection tactics are limited 
B)  credit reporting agencies must follow certain rules about accuracy in consumer reports 
C)  creditors must follow certain procedures for handling charges disputed by consumers 
D)  creditors may not charge interest rates that exceed the federal maximum rates 
E)  all of the other choices are features of the Act

Exam 19: Consumer Protection

The Pure Food and Drug Act of 1906 was the first regulation of food and drugs. What sparked interest in this concern?

Trade regulation rules tend to be issued in areas where the FTC thinks there are particular problems with deception.

Medical devices approved by the FDA before being sold and then monitored for problems.

When the Consumer Credit Protection Act was passed in 1968 there was about ____ worth of consumer credit outstanding.

____ is a regulation written by the Federal Reserve Board specifying items that must be listed as part of consumer finance charges under the Truth-in-Lending Act.

If you lose the bank card you use to withdraw cash from your bank by machine, and you report it to the bank within two days, you are liable for how much in losses?

A possible benefit of drug regulations in place in many European nations is that:

Which of the following is not a function of the Food and Drug Administration?

The intent of the Nutrition Labeling and Education Act is to:

In Chuway v. National Action Financial Services, where Chuway received a letter from debt collector National that requested payment of the amount she owed on a debt, the appeals court held that the debt collector:

The government agency charged with monitoring food and drug safety is the:

Truth in lending refers to the requirement that creditors:

The FDA issues standards for nutrition labels on food.

Which of these is most likely to be attacked by the FTC as a deceptive business practice?

In Schuchmann v. Air Services Heating and Air Conditioning a home owner bought a heating and A/C unit with a lifetime warranty. After five years the company refused to honor the warranty because it was too expensive. When the consumer sued, the courts held that:

In Wyeth v. Levine the Supreme Court held that FDA approval of the warning label on a drug did not mean the drug maker was not responsible for updating the label to include new relevant safety information.

The Food, Drug and Cosmetic Act of 1938 did not expand the powers of the FDA to include:

The FTC uses the ____ to put its policy about advertising into effect:

The Food Quality Protection Act holds that a substance may be approved for use in food if:

What is not a feature of the Consumer Credit Protection Act:

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