Question 1

Quackity Quack Company's ad states that its product is "the best on the market today." Because of this ad,the Federal Trade Com?mission is most likely to

Accepted Answer

A) do nothing. 
B) draft a formal complaint. 
C) issue a cease-and-desist order. 
D) require counteradvertising. 
A) do nothing. 
B) draft a formal complaint. 
C) issue a cease-and-desist order. 
D) require counteradvertising. A

Question 2

Darren wants to go into the business of direct merchandise sales.What are the legal problems that Darren might encounter in telemarketing? In sell?ing door-to-door? In marketing over the Internet? In soliciting sales through the mail?

Accepted Answer

Telemarketers are the target of many consumer complaints,and must reveal extensive information to comply with state and federal laws.Telemarketers must tell customers that they are receiving a sales call,name the business and products to be sold,state the total cost of the products,and make other disclosures.Door-to-door salespersons make contracts that buyers may rescind within three days of signing.This federally-mandated "cooling-off" period has an impact on sales.The Internet is a rapidly growing tool for sales,but Darren should be aware that it is not unregulated.All laws that apply to more traditional forms of commerce,such as deceptive practice laws,generally apply to Internet commerce.Finally,direct mail is appropriate for advertisements,but Darren should know that unsolicited products sent through the mail can be kept by their recipients without tendering payment.In general,Darren should know that legitimate businesses can and do make proper and profitable use of all these sales methods,but state and federal laws police all of them for fraudulent operators.

Question 3

Vague generalities and obvious exaggerations constitute deceptive advertising.

Accepted Answer

A) True 
 B)False  False

Question 4

Va-Va-Voom Products,Inc.,engages in de?ceptive advertising when it markets its product Weight-No-More as able to help consumers lose weight in their sleep.Va-Va-Voom is ordered to include in all future adver?tising of Weight-No-More the statement,"This product will not cause anyone to lose weight while sleeping." This is

Accepted Answer

A) a counteradvertising order. 
B) a multiple product order. 
C) a "cooling-off" law. 
D) a validation notice. 
A) a counteradvertising order. 
B) a multiple product order. 
C) a "cooling-off" law. 
D) a validation notice.

Question 5

Bodie's application to City Bank for a credit card is denied.Bodie can obtain information on her credit history in a credit agency's files under

Accepted Answer

A) no federal law. 
B) the Equal Credit Opportunity Act. 
C) the Fair Credit Reporting Act. 
D) the Fair Debt Collection Practices Act. 
A) no federal law. 
B) the Equal Credit Opportunity Act. 
C) the Fair Credit Reporting Act. 
D) the Fair Debt Collection Practices Act.

Question 6

Federal laws often provide more sweeping and significant protections for the consumer than state laws.

Accepted Answer

A) True 
 B)False

Question 7

Sweet Treats,Inc.,wants to market a new snack food.On the prod?uct's la?bel,standard nutrition facts are

Accepted Answer

A) prohibited. 
B) required. 
C) strictly voluntary. 
D) warranted by the nature of the food. 
A) prohibited. 
B) required. 
C) strictly voluntary. 
D) warranted by the nature of the food.

Question 8

Wheels & Deals Corporation is subject to the Truth-in-Lending Act,which is a key statute regulating the credit and credit-card industries and concerns

Accepted Answer

A) the credit-worthiness of financial institutions. 
B) the disclosure of credit terms. 
C) the limits on types of credit. 
D) the limits on types of debt. 
A) the credit-worthiness of financial institutions. 
B) the disclosure of credit terms. 
C) the limits on types of credit. 
D) the limits on types of debt.

Question 9

The key federal statute regulating the credit and credit-card industries is basically a disclosure law.

Accepted Answer

A) True 
 B)False

Question 10

Special Roast Coffee,Inc.,processes and sells a variety of coffee products.Special Roast's product packages must include

Accepted Answer

A) the company owner's identity. 
B) the contents' net quantity. 
C) the restaurants and stores in which the product is sold. 
D) the type of consumer most likely interested in the product. 
A) the company owner's identity. 
B) the contents' net quantity. 
C) the restaurants and stores in which the product is sold. 
D) the type of consumer most likely interested in the product.

Question 11

Fun-E Products,Inc.,makes and sells toys.The government agency that has the authority to remove a poten?tially hazardous toy from the market is

Accepted Answer

A) the Consumer Product Safety Commission. 
B) the Federal Reserve Board of Governors. 
C) the Federal Trade Commission. 
D) the Food and Drug Administration. 
A) the Consumer Product Safety Commission. 
B) the Federal Reserve Board of Governors. 
C) the Federal Trade Commission. 
D) the Food and Drug Administration.

Question 12

Kip opens an account at a Lotsa Goodies Store,and buys a digital music player and other items,but makes no payments on the account.To collect the debt,Mako,the manager,contacts Kip's parents.This violates

Accepted Answer

A) no federal law. 
B) the Fair and Accurate Credit Transactions Act. 
C) the Fair Debt Collection Practices Act. 
D) the Truth-in-Lending Act. 
A) no federal law. 
B) the Fair and Accurate Credit Transactions Act. 
C) the Fair Debt Collection Practices Act. 
D) the Truth-in-Lending Act.

Question 13

Penny Stock Company faxes ads to Quality Personnel Corporation and other businesses without the recipients' permission.This is

Accepted Answer

A) illegal. 
B) legal and smart because such ads are generally cheap. 
C) legal but not smart because such ads are generally ineffective. 
D) legal but only potentially smart,depending on the response rate. 
A) illegal. 
B) legal and smart because such ads are generally cheap. 
C) legal but not smart because such ads are generally ineffective. 
D) legal but only potentially smart,depending on the response rate.

Question 14

Dita takes out a student loan from Everloan Bank.When she fails to make the scheduled payments for six months,Everloan advises her of further ac?tion that it will take.This violates

Accepted Answer

A) no federal law. 
B) the Fair and Accurate Credit Transactions Act. 
C) the Fair Debt Collection Practices Act. 
D) the Truth-in-Lending Act. 
A) no federal law. 
B) the Fair and Accurate Credit Transactions Act. 
C) the Fair Debt Collection Practices Act. 
D) the Truth-in-Lending Act.

Question 15

Credit can be denied solely on the basis of marital status.

Accepted Answer

A) True 
 B)False

Question 16

Green Grocer Corporation makes and markets a variety of processed food products.The federal agency responsible for enforcing health regula?tions con?cerning food is

Accepted Answer

A) the Consumer Product Safety Commission. 
B) the Federal Reserve Board of Governors. 
C) the Federal Trade Commission. 
D) the Food and Drug Administration. 
A) the Consumer Product Safety Commission. 
B) the Federal Reserve Board of Governors. 
C) the Federal Trade Commission. 
D) the Food and Drug Administration.

Question 17

Tonya and many other consumers complain to the Federal Trade Commission (FTC)that a Whoopie Wonders Company ad is deceptive.The FTC's first step is to

Accepted Answer

A) draft a formal complaint. 
B) investigate. 
C) issue a cease-and-desist order. 
D) require counteradvertising. 
A) draft a formal complaint. 
B) investigate. 
C) issue a cease-and-desist order. 
D) require counteradvertising.

Question 18

A credit-cardholder is liable for all unauthorized charges made before the creditor is notified that the card has been lost.

Accepted Answer

A) True 
 B)False

Question 19

Manufacturers are required to report on any products already sold if the products have proved to be hazardous.

Accepted Answer

A) True 
 B)False

Question 20

Food products are not required to bear labels detailing the nutritional content.

Accepted Answer

A) True 
 B)False

Exam 45: Consumer Law

Quackity Quack Company's ad states that its product is "the best on the market today." Because of this ad,the Federal Trade Com?mission is most likely to

Darren wants to go into the business of direct merchandise sales.What are the legal problems that Darren might encounter in telemarketing? In sell?ing door-to-door? In marketing over the Internet? In soliciting sales through the mail?

Vague generalities and obvious exaggerations constitute deceptive advertising.

Bodie's application to City Bank for a credit card is denied.Bodie can obtain information on her credit history in a credit agency's files under

Federal laws often provide more sweeping and significant protections for the consumer than state laws.

Sweet Treats,Inc.,wants to market a new snack food.On the prod?uct's la?bel,standard nutrition facts are

Wheels & Deals Corporation is subject to the Truth-in-Lending Act,which is a key statute regulating the credit and credit-card industries and concerns

The key federal statute regulating the credit and credit-card industries is basically a disclosure law.

Special Roast Coffee,Inc.,processes and sells a variety of coffee products.Special Roast's product packages must include

Fun-E Products,Inc.,makes and sells toys.The government agency that has the authority to remove a poten?tially hazardous toy from the market is

Kip opens an account at a Lotsa Goodies Store,and buys a digital music player and other items,but makes no payments on the account.To collect the debt,Mako,the manager,contacts Kip's parents.This violates

Penny Stock Company faxes ads to Quality Personnel Corporation and other businesses without the recipients' permission.This is

Dita takes out a student loan from Everloan Bank.When she fails to make the scheduled payments for six months,Everloan advises her of further ac?tion that it will take.This violates

Credit can be denied solely on the basis of marital status.

Green Grocer Corporation makes and markets a variety of processed food products.The federal agency responsible for enforcing health regula?tions con?cerning food is

Tonya and many other consumers complain to the Federal Trade Commission (FTC)that a Whoopie Wonders Company ad is deceptive.The FTC's first step is to

A credit-cardholder is liable for all unauthorized charges made before the creditor is notified that the card has been lost.

Manufacturers are required to report on any products already sold if the products have proved to be hazardous.

Food products are not required to bear labels detailing the nutritional content.

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

Ethics and Business Decision Making

Intentional Torts and Privacy

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crime

Nature and Terminology

Agreement in Traditional and E-Contracts

Consideration

Capacity and Legality

Mistakes, fraud, and Voluntary Consent

The Statute of Frauds

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

The Formation of Sales and Lease Contracts

Title, risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

International Law in a Global Economy

The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

Liability,defenses,and Discharge

Checks and Banking in the Digital Age

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Mortgages Foreclosures After the Recession

Agency Formation and Duties

Agency Liability and Termination

Employment,immigration,and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporate Formation and Financing

Corporate Directors,officers, Shareholders

Corporate Merger, consolidation, Termination

Securities Law Corporate Governance

Law for Small Business

Administrative Law

Environmental Law

Antitrust Law

Professional Liaility and Accountability

Personal Property and Bailments

Real Property Landlord-Tenant Relationships

Insurance

Wills and Trusts

Legal and Ethical Considerations in Sustainability, Discovery, and Corporate Behavior

Legal and Ethical Issues in Contemporary Society

Contracts and Agreements

Legal Issues in Iowa's Video Game Labeling Statute, National Export Initiative, and Contract Law

Banking and Loan Liability

Bankruptcy and Agricultural Credit: Debts, Reporting, and Risk

Legal and Ethical Issues in Employment and Agency Relationships

Legal Issues in Business Franchising, LLC Management, Tax Collection, Director Liability, and Securities Regulations

Compliance and Ethics Issues in Business Operations