Question 1

Brew Coffee Company sells coffee and related beverages. The company's ad contends that ambitious businesspersons "Drink Us & Rise Up in the World!' " The Federal Trade Commission would consider this ad to be​

Accepted Answer

A)   ​false and misleading.
B)   ​impermissibly vague and general.
C)   ​a deceptive half-truth.
D)   ​none of the choices. D

Question 2

The Fair Debt Collection Practices Act attempts to ensure that creditors are always paid by debtors.​

Accepted Answer

A) True 
 B)False  False

Question 3

​Spicy Salsa Company complains to the Federal Trade Commission (FTC) about an ad by Tangy Sauces Inc., Spicy's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to

Accepted Answer

A)   ​conduct negotiations between the competitors.
B)   ​send a formal complaint.
C)   ​issue a cease-and-desist order.
D)   ​permit Spicy Salsa to distribute a similarly deceptive counter-ad. B

Question 4

Obvious exaggerations are not permissible in advertising.​

Accepted Answer

A) True 
 B)False

Question 5

Lawncare Company and Mowers, Inc. make yard tools. Both companies use only steel produced in the United States. Lawncare's ad claims, "We use only U.S. steel, while our competitors use inferior foreign steel!" This statement is​

Accepted Answer

A)   ​an obvious exaggeration.
B)   ​puffery.
C)   ​a false claim about a competitor's product.
D)   ​a half-truth.

Question 6

Vague generalities are permissible in advertising.​

Accepted Answer

A) True 
 B)False

Question 7

Phil has a credit card from Quality Credit, Inc. Quality wants to change to the terms. The firm​

Accepted Answer

A)   ​must give Phil at least thirty days' notice.
B)   ​must give Phil at least forty-five days' notice.
C)   ​need not give Phil any notice.
D)   ​is not allowed to change the terms.

Question 8

Food products are required to bear labels detailing the nutritional content.​

Accepted Answer

A) True 
 B)False

Question 9

The credit department of Mega-Mart often calls Nora at work about an overdue bill. Nora's employer objects. This is a violation of​

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.

Question 10

Logan's application to Metro Bank for a credit card is denied. Logan can obtain information on his 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.

Question 11

Mouth-Waterin' Treats Company wants to sell its candy in a normal-sized package labeled "Gigantic Size." NuFabrics, Inc., wants to advertise its sweaters as having "That Wool Feel," but does not want to specify on labels that the sweaters are 100 percent polyester. Can these firms market their products as they would like? If not, why not?

Accepted Answer

The answer of Mouth-Waterin' Treats Company wants to sell its...

Question 12

Deceptive advertising occurs if a reasonable consumer would be misled by the advertising claim.​

Accepted Answer

A) True 
 B)False

Question 13

Breadboard, Inc., makes and sells a variety of grain products. Breadboard'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.

Question 14

Ads can be unfair but not deceptive.​

Accepted Answer

A) True 
 B)False

Question 15

One of the most important federal consumer protection laws is directed at deceptive trade practices.​

Accepted Answer

A) True 
 B)False

Question 16

Bea borrows funds from Credit Union to repair her home and to buy a car. She buys a laptop from Discount Store in a transaction financed by the seller. If these parties are subject to the Truth-in-Lending Act, Regulation Z applies to​

Accepted Answer

A)   ​the car loan only.
B)   ​the home repair loan only.
C)   ​the retail installment sale only.
D)   ​the car loan, the home repair loan, and the retail installment sale.

Question 17

Ads must disclose qualifying information underlying their claims.​

Accepted Answer

A) True 
 B)False

Question 18

When an advertising claim has the appearance of authenticity, it does not create problems.​

Accepted Answer

A) True 
 B)False

Question 19

In its ads, Crunchy Inc. makes various claims about its snack products. Crunchy's advertising claims would most likely be deemed deceptive if the claims​

Accepted Answer

A)   ​mislead a reasonable consumer.
B)   ​contain vague generalities.
C)   ​consist of what is known as puffery.
D)   ​include obvious exaggerations.

Question 20

Rely Battery Corporation makes batteries for motor vehicles. The Federal Trade Commission (FTC) learns that Chuck's Automotive Stores, a retail company that sells Rely's batteries, engages in deceptive advertising practices. What actions can the FTC take against Chuck's?​

Accepted Answer

The answer of Rely Battery Corporation makes batteries for motor...

Exam 44: Consumer Law

Brew Coffee Company sells coffee and related beverages. The company's ad contends that ambitious businesspersons "Drink Us & Rise Up in the World!' " The Federal Trade Commission would consider this ad to be​

The Fair Debt Collection Practices Act attempts to ensure that creditors are always paid by debtors.​

​Spicy Salsa Company complains to the Federal Trade Commission (FTC) about an ad by Tangy Sauces Inc., Spicy's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to

Obvious exaggerations are not permissible in advertising.​

Lawncare Company and Mowers, Inc. make yard tools. Both companies use only steel produced in the United States. Lawncare's ad claims, "We use only U.S. steel, while our competitors use inferior foreign steel!" This statement is​

Vague generalities are permissible in advertising.​

Phil has a credit card from Quality Credit, Inc. Quality wants to change to the terms. The firm​

Food products are required to bear labels detailing the nutritional content.​

The credit department of Mega-Mart often calls Nora at work about an overdue bill. Nora's employer objects. This is a violation of​

Logan's application to Metro Bank for a credit card is denied. Logan can obtain information on his credit history in a credit agency's files under​

Deceptive advertising occurs if a reasonable consumer would be misled by the advertising claim.​

Breadboard, Inc., makes and sells a variety of grain products. Breadboard's product packages must include​

Ads can be unfair but not deceptive.​

One of the most important federal consumer protection laws is directed at deceptive trade practices.​

Bea borrows funds from Credit Union to repair her home and to buy a car. She buys a laptop from Discount Store in a transaction financed by the seller. If these parties are subject to the Truth-in-Lending Act, Regulation Z applies to​

Ads must disclose qualifying information underlying their claims.​

When an advertising claim has the appearance of authenticity, it does not create problems.​

In its ads, Crunchy Inc. makes various claims about its snack products. Crunchy's advertising claims would most likely be deemed deceptive if the claims​

Rely Battery Corporation makes batteries for motor vehicles. The Federal Trade Commission (FTC) learns that Chuck's Automotive Stores, a retail company that sells Rely's batteries, engages in deceptive advertising practices. What actions can the FTC take against Chuck's?​

Brew Coffee Company sells coffee and related beverages. The company's ad contends that ambitious businesspersons "Drink Us & Rise Up in the World!' " The Federal Trade Commission would consider this ad to be

The Fair Debt Collection Practices Act attempts to ensure that creditors are always paid by debtors.

Spicy Salsa Company complains to the Federal Trade Commission (FTC) about an ad by Tangy Sauces Inc., Spicy's competitor. The FTC investigates and concludes that the ad is deceptive. The FTC's next step is to

Obvious exaggerations are not permissible in advertising.

Lawncare Company and Mowers, Inc. make yard tools. Both companies use only steel produced in the United States. Lawncare's ad claims, "We use only U.S. steel, while our competitors use inferior foreign steel!" This statement is

Vague generalities are permissible in advertising.

Phil has a credit card from Quality Credit, Inc. Quality wants to change to the terms. The firm

Food products are required to bear labels detailing the nutritional content.

The credit department of Mega-Mart often calls Nora at work about an overdue bill. Nora's employer objects. This is a violation of

Logan's application to Metro Bank for a credit card is denied. Logan can obtain information on his credit history in a credit agency's files under

Deceptive advertising occurs if a reasonable consumer would be misled by the advertising claim.

Breadboard, Inc., makes and sells a variety of grain products. Breadboard's product packages must include

Ads can be unfair but not deceptive.

One of the most important federal consumer protection laws is directed at deceptive trade practices.

Bea borrows funds from Credit Union to repair her home and to buy a car. She buys a laptop from Discount Store in a transaction financed by the seller. If these parties are subject to the Truth-in-Lending Act, Regulation Z applies to

Ads must disclose qualifying information underlying their claims.

When an advertising claim has the appearance of authenticity, it does not create problems.

In its ads, Crunchy Inc. makes various claims about its snack products. Crunchy's advertising claims would most likely be deemed deceptive if the claims

Rely Battery Corporation makes batteries for motor vehicles. The Federal Trade Commission (FTC) learns that Chuck's Automotive Stores, a retail company that sells Rely's batteries, engages in deceptive advertising practices. What actions can the FTC take against Chuck's?