Question 1

The FTC focuses on ________ when it attacks unfair acts or practices.

Accepted Answer

A) free and fair trade 
B) antitrust action 
C) consumer harm 
D) anticompetitive behavior 
A) free and fair trade 
B) antitrust action 
C) consumer harm 
D) anticompetitive behavior

Question 2

The Magnuson-Moss Warranty Act of 1975 mainly applies to:

Accepted Answer

A) presale agreements for products used for commercial purposes. 
B) written warranties for products used for consumer purposes. 
C) presale agreements for products used for consumer purposes. 
D) written warranties for products used for commercial purposes. 
A) presale agreements for products used for commercial purposes. 
B) written warranties for products used for consumer purposes. 
C) presale agreements for products used for consumer purposes. 
D) written warranties for products used for commercial purposes.

Question 3

Which of the following instances of lending is most likely to be covered by the Truth in Lending Act (TILA)?

Accepted Answer

A) A savings and loan association extends a $30,000 credit to a retail consumer. 
B) An auto retailer extends a $25,000 credit to a buyer payable in five equal installments. 
C) An accountancy firm extends a $10,000 one-time credit to an employee. 
D) A bank extends a $20,000 credit to a farmer for use in agricultural purposes. 
A) A savings and loan association extends a $30,000 credit to a retail consumer. 
B) An auto retailer extends a $25,000 credit to a buyer payable in five equal installments. 
C) An accountancy firm extends a $10,000 one-time credit to an employee. 
D) A bank extends a $20,000 credit to a farmer for use in agricultural purposes.

Question 4

The Federal Trade Commission recently instituted an adjudicative proceeding against OK Corp. ,a manufacturer of inflatable dolls.OK is alleged to have made deceptive statements concerning the quality of its product in nationwide advertisements.Which of the following statements is accurate?

Accepted Answer

A) If the statements in the OK ads were material misrepresentations that could mislead reasonable consumers,the FTC's deception standard would require a conclusion that OK did engage in deceptive advertising. 
B) OK may be held to have engaged in deceptive advertising regardless of whether the material misrepresentations could mislead reasonable consumers. 
C) If the FTC proves that the intent in OK advertisements was to offend reasonable consumers,then an administrative law judge could order OK to cease making such an advertising claim. 
D) OK cannot be held to have engaged in deceptive advertising if no consumers have actually been deceived by the OK ads. 
A) If the statements in the OK ads were material misrepresentations that could mislead reasonable consumers,the FTC's deception standard would require a conclusion that OK did engage in deceptive advertising. 
B) OK may be held to have engaged in deceptive advertising regardless of whether the material misrepresentations could mislead reasonable consumers. 
C) If the FTC proves that the intent in OK advertisements was to offend reasonable consumers,then an administrative law judge could order OK to cease making such an advertising claim. 
D) OK cannot be held to have engaged in deceptive advertising if no consumers have actually been deceived by the OK ads.

Question 5

As explained in the case in the text,Evory v.RJM Acquisitions Funding,L.L.C. ,the Fair Debt Collection Practices Act (FDCPA)sets out categories for forbidden collector practices and lists specific examples of each category.Which of the following is not likely to constitute harassment,oppression,or abuse?

Accepted Answer

A) Threats of violence 
B) Obscene language 
C) A voicemail message 
D) Repeated phone calls 
A) Threats of violence 
B) Obscene language 
C) A voicemail message 
D) Repeated phone calls

Question 6

The Truth in Lending Act (TILA)specifies that if a home equity plan involves a variable interest rate,the "index rate" to which changes in the APR are pegged must be based on some publicly available rate and must not be under the creditor's control.

Accepted Answer

A) True 
 B)False

Question 7

If a $100 replacement part for a piece of manufacturing equipment is sold to a manufacturing plant,the Magnuson-Moss Act does not apply to the sale.

Accepted Answer

A) True 
 B)False

Question 8

Many alleged violations of statutes or trade regulation rules are never adjudicated by the FTC.Instead,they are settled through a ________.

Accepted Answer

A) cease-and-desist order 
B) standard $16,000 fine per violation 
C) consent order 
D) standard $26,000 fine per violation 
A) cease-and-desist order 
B) standard $16,000 fine per violation 
C) consent order 
D) standard $26,000 fine per violation

Question 9

Section 5 of the FTC Act empowers the Commission to regulate:

Accepted Answer

A) free and fair trade between countries. 
B) antitrust action prohibited by the Dodd-Frank Act. 
C) anticompetitive practices made unlawful by the Sherman Act. 
D) mergers and acquisitions. 
A) free and fair trade between countries. 
B) antitrust action prohibited by the Dodd-Frank Act. 
C) anticompetitive practices made unlawful by the Sherman Act. 
D) mergers and acquisitions.

Question 10

The TILA's detailed disclosure provisions break down into three categories.One of those categories is that of:

Accepted Answer

A) open-end credit. 
B) debit card applications. 
C) mixed credit. 
D) consumer loans. 
A) open-end credit. 
B) debit card applications. 
C) mixed credit. 
D) consumer loans.

Question 11

Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 was enacted to regulate:

Accepted Answer

A) personal unsolicited calls. 
B) personal e-mail messages. 
C) commercial e-mail messages. 
D) commercial unsolicited calls. 
A) personal unsolicited calls. 
B) personal e-mail messages. 
C) commercial e-mail messages. 
D) commercial unsolicited calls.

Question 12

Which of the following is NOT a possible consequence resulting from a successful FTC adjudicative proceeding attacking deceptive or unfair behavior?

Accepted Answer

A) Affirmative disclosure 
B) All-products order 
C) Corrective advertising 
D) Imprisonment 
A) Affirmative disclosure 
B) All-products order 
C) Corrective advertising 
D) Imprisonment

Question 13

Which of the following statements about the Federal Trade Commission is false?

Accepted Answer

A) The Federal Trade Commission is headed by five commissioners. 
B) The Federal Trade Commission's headquarters is in Washington,DC. 
C) The Federal Trade Commission was formed shortly after the 1914 enactment of the Federal Trade Commission Act. 
D) The Federal Trade Commission is part of the executive branch of the federal government. 
A) The Federal Trade Commission is headed by five commissioners. 
B) The Federal Trade Commission's headquarters is in Washington,DC. 
C) The Federal Trade Commission was formed shortly after the 1914 enactment of the Federal Trade Commission Act. 
D) The Federal Trade Commission is part of the executive branch of the federal government.

Question 14

The ________ case is an example of litigation initiated by commercial telemarketers questioning the legal validity of the do-not-call registry.

Accepted Answer

A) Central Hudson 
B) Kraft 
C) Evory 
D) Mainstream Marketing 
A) Central Hudson 
B) Kraft 
C) Evory 
D) Mainstream Marketing

Question 15

Which of the following acts is most likely to violate the Telemarketing Sales Rule (TSR)?

Accepted Answer

A) Calling a consumer's residence at 9:30 p.m.to inform the consumer about an exciting prize promotion 
B) Soliciting sales through the mailing of a catalog and then receiving customers' orders by telephone 
C) Making telephone calls to a customer to get an appointment for a face-to-face sales presentation 
D) Making telephone calls of solicitation to a consumer but completing the transaction in a face-to-face meeting 
A) Calling a consumer's residence at 9:30 p.m.to inform the consumer about an exciting prize promotion 
B) Soliciting sales through the mailing of a catalog and then receiving customers' orders by telephone 
C) Making telephone calls to a customer to get an appointment for a face-to-face sales presentation 
D) Making telephone calls of solicitation to a consumer but completing the transaction in a face-to-face meeting

Question 16

Besides imposing duties on consumer reporting agencies,the Fair Credit Reporting Act (FCRA)imposes duties on users of credit reports generated by such agencies.

Accepted Answer

A) True 
 B)False

Question 17

The ________ Act aids victims of identity theft by allowing them to file identity theft reports with consumer reporting agencies.

Accepted Answer

A) Fair Credit Billing 
B) Equal Credit Opportunity 
C) Fair and Accurate Credit Transactions 
D) Fair Credit Reporting 
A) Fair Credit Billing 
B) Equal Credit Opportunity 
C) Fair and Accurate Credit Transactions 
D) Fair Credit Reporting

Question 18

What is the main federal body concerned with the safety of consumer products?

Accepted Answer

A) Consumer Product Safety Commission (CPS
C)  
B) International Product Council (IP
C)  
C) Federal Consumer Watchdog (FCW) 
D) Internal Revenue Service (IRS) 
A) Consumer Product Safety Commission (CPS
C)  
B) International Product Council (IP
C)  
C) Federal Consumer Watchdog (FCW) 
D) Internal Revenue Service (IRS)

Question 19

According to the Magnuson-Moss Warranty Act of 1975,a consumer is a buyer or transferee who either uses the product himself or sells it to another consumer.

Accepted Answer

A) True 
 B)False

Question 20

Max's credit card was stolen last week.By the time Max reported this theft and got his card canceled,the thief had already withdrawn $10,000 using his card.Under the Truth in Lending Act (TILA),what is Max's maximum liability for this unauthorized use of his card?

Accepted Answer

A) $100 
B) $50 
C) $500 
D) $10,000 
A) $100 
B) $50 
C) $500 
D) $10,000

Exam 48: The Federal Trade Commission Act and Consumer Protection Laws

The FTC focuses on ________ when it attacks unfair acts or practices.

The Magnuson-Moss Warranty Act of 1975 mainly applies to:

Which of the following instances of lending is most likely to be covered by the Truth in Lending Act (TILA)?

The Federal Trade Commission recently instituted an adjudicative proceeding against OK Corp. ,a manufacturer of inflatable dolls.OK is alleged to have made deceptive statements concerning the quality of its product in nationwide advertisements.Which of the following statements is accurate?

The Truth in Lending Act (TILA)specifies that if a home equity plan involves a variable interest rate,the "index rate" to which changes in the APR are pegged must be based on some publicly available rate and must not be under the creditor's control.

If a $100 replacement part for a piece of manufacturing equipment is sold to a manufacturing plant,the Magnuson-Moss Act does not apply to the sale.

Many alleged violations of statutes or trade regulation rules are never adjudicated by the FTC.Instead,they are settled through a ________.

Section 5 of the FTC Act empowers the Commission to regulate:

The TILA's detailed disclosure provisions break down into three categories.One of those categories is that of:

Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 was enacted to regulate:

Which of the following is NOT a possible consequence resulting from a successful FTC adjudicative proceeding attacking deceptive or unfair behavior?

Which of the following statements about the Federal Trade Commission is false?

The ________ case is an example of litigation initiated by commercial telemarketers questioning the legal validity of the do-not-call registry.

Which of the following acts is most likely to violate the Telemarketing Sales Rule (TSR)?

Besides imposing duties on consumer reporting agencies,the Fair Credit Reporting Act (FCRA)imposes duties on users of credit reports generated by such agencies.

The ________ Act aids victims of identity theft by allowing them to file identity theft reports with consumer reporting agencies.

What is the main federal body concerned with the safety of consumer products?

According to the Magnuson-Moss Warranty Act of 1975,a consumer is a buyer or transferee who either uses the product himself or sells it to another consumer.

Max's credit card was stolen last week.By the time Max reported this theft and got his card canceled,the thief had already withdrawn $10,000 using his card.Under the Truth in Lending Act (TILA),what is Max's maximum liability for this unauthorized use of his card?

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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