Question 1

Pepsi creates an advertisement suggesting it sponsors the U.S. Olympic basketball team by showing a basketball game in a commercial. This is a form of ________ marketing.

Accepted Answer

A)  stealth 
B)  direct ambush 
C)  incidental ambush 
D)  indirect ambush

Question 2

Puffery is:

Accepted Answer

A)  a deliberate attempt to mislead and deceive. 
B)  any illegal marketing activity. 
C)  increased product prices to cover advertising costs. 
D)  an exaggerated claim with no overt attempt to mislead or deceive.

Question 3

The practice of purchasing internet domains that are valuable to other people, companies, or organizations is:

Accepted Answer

A)  brand infringement. 
B)  domain infringement. 
C)  domain squatting. 
D)  brand parity.

Question 4

In terms of substantiation of advertising claims, the FTC and the courts assume that consumers can and will read fine print or qualifying language that is placed in an advertisement.

Accepted Answer

A) True 
 B)False

Question 5

When a substantial number of people are misled by a series of commercials or an advertisement, it is deemed to be deceptive or misleading.

Accepted Answer

A) True 
 B)False

Question 6

Critics of the beer industry and marketers agree on all of the following statements about alcohol and underage individuals except:

Accepted Answer

A)  many beer commercials encourage underage drinking. 
B)  many beer commercials encourage brand loyalty or brand switching to a population that should not even be drinking. 
C)  the use of sex and humor in beer ads has made alcohol appealing to underage individuals. 
D)  the public service announcements discourage underage drinking.

Question 7

If Megan wants to know if people have complained about a particular health club being unsafe or unclean, she should contact the:

Accepted Answer

A)  National Advertising Division. 
B)  Federal Trade Commission. 
C)  Better Business Bureau. 
D)  National Advertising Review Board.

Question 8

The NARB is supported by the Federal Trade Commission and has legal authority over cases it reviews.

Accepted Answer

A) True 
 B)False

Question 9

Concerns and criticisms regarding advertising include the following except advertising:

Accepted Answer

A)  causes people to buy more than they can afford. 
B)  leads to socialism. 
C)  overemphasizes materialism. 
D)  increases the costs of goods and services.

Question 10

When the Federal Trade Commission orders a firm to prepare corrective advertisements, the goal is to bring people back to the neutral state that existed before the false and deceptive advertising was used by the company.

Accepted Answer

A) True 
 B)False

Question 11

A claim is when a firm makes an exaggerated statement about a good or service, while puffery is when a firm makes a factual statement about a good or service.

Accepted Answer

A) True 
 B)False

Question 12

The Children's Advertising Review Unit of the CBBB operates in a manner similar to the National Advertising Division of the CBBB in terms of handling complaints.

Accepted Answer

A) True 
 B)False

Question 13

In terms of substantiation of advertising claims, the FTC and the courts state that evidence presented must be for the exact product being tested, not for a similar product.

Accepted Answer

A) True 
 B)False

Question 14

If a consent agreement cannot be reached with a company, the Federal Trade Commission then issues a(n):

Accepted Answer

A)  cease and desist order. 
B)  corrective advertising directive. 
C)  appeal to the Court of Appeals. 
D)  administrative complaint.

Question 15

A complaint filed with the National Advertising Division of the Council of Better Business Bureaus regarding an unsubstantiated advertising claim would be dismissed because substantiation is not a criterion.

Accepted Answer

A) True 
 B)False

Question 16

Which agency has the authority to order corrective advertising?

Accepted Answer

A)  Federal Communications Commission 
B)  Federal Trade Commission 
C)  Food and Drug Administration 
D)  Bureau of Alcohol, Tobacco, and Firearms

Question 17

When a company agrees with the Federal Trade Commission and signs a consent order, the company agrees to stop the ad or marketing practice and also agrees to pay civil penalties.

Accepted Answer

A) True 
 B)False

Question 18

When the FTC issues an administrative complaint and an administrative judge rules a violation has occurred, the judge issues a cease and desist order.

Accepted Answer

A) True 
 B)False

Question 19

Brand infringement occurs when a company creates a brand name that closely resembles a popular or successful brand.

Accepted Answer

A) True 
 B)False

Question 20

Hedonism is the natural craving for balance in one's life.

Accepted Answer

A) True 
 B)False

Exam 14: Regulations and Ethical Concerns

Pepsi creates an advertisement suggesting it sponsors the U.S. Olympic basketball team by showing a basketball game in a commercial. This is a form of ________ marketing.

Puffery is:

The practice of purchasing internet domains that are valuable to other people, companies, or organizations is:

In terms of substantiation of advertising claims, the FTC and the courts assume that consumers can and will read fine print or qualifying language that is placed in an advertisement.

When a substantial number of people are misled by a series of commercials or an advertisement, it is deemed to be deceptive or misleading.

Critics of the beer industry and marketers agree on all of the following statements about alcohol and underage individuals except:

If Megan wants to know if people have complained about a particular health club being unsafe or unclean, she should contact the:

The NARB is supported by the Federal Trade Commission and has legal authority over cases it reviews.

Concerns and criticisms regarding advertising include the following except advertising:

When the Federal Trade Commission orders a firm to prepare corrective advertisements, the goal is to bring people back to the neutral state that existed before the false and deceptive advertising was used by the company.

A claim is when a firm makes an exaggerated statement about a good or service, while puffery is when a firm makes a factual statement about a good or service.

The Children's Advertising Review Unit of the CBBB operates in a manner similar to the National Advertising Division of the CBBB in terms of handling complaints.

In terms of substantiation of advertising claims, the FTC and the courts state that evidence presented must be for the exact product being tested, not for a similar product.

If a consent agreement cannot be reached with a company, the Federal Trade Commission then issues a(n) :

A complaint filed with the National Advertising Division of the Council of Better Business Bureaus regarding an unsubstantiated advertising claim would be dismissed because substantiation is not a criterion.

Which agency has the authority to order corrective advertising?

When a company agrees with the Federal Trade Commission and signs a consent order, the company agrees to stop the ad or marketing practice and also agrees to pay civil penalties.

When the FTC issues an administrative complaint and an administrative judge rules a violation has occurred, the judge issues a cease and desist order.

Brand infringement occurs when a company creates a brand name that closely resembles a popular or successful brand.

Hedonism is the natural craving for balance in one's life.