Question 1

Mello's Mattress Company advertises a special sale on mattresses on its Web site. The mattresses are normally sold for $1,000,but are advertised on the site for $499. The sale price does not include the shipping cost. Mello's charges $250 for shipping. To avoid claims of Advertising,Marketing,and Sales,Mello's should

Accepted Answer

A)  clearly and conspicuously disclose the shipping cost in its ads.
B)  display the shipping cost in small print on Mello's Web page.
C)  include the shipping cost on the last page of Mello's Web site.
D)  not reveal the shipping cost. A

Question 2

Dina takes out a student loan from Earnest Bank. When she fails to make the scheduled payments for six months,Earnest advises her of further action that it will take. 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. A

Question 3

Smelting & Refining Company generates solid waste considered hazardous. The company labels and packages properly all waste to be transported to a disposal site. Under the Resource Conservation and Recovery Act,this is most likely

Accepted Answer

A)  not a violation.
B)  a violation because Smelting & Refining generates solid waste.
C)  a violation because the waste is transported off-site.
D)  a violation because the waste is considered hazardous. A

Question 4

Those who knowingly violate the Clean Air Act may be subject to criminal liability.

Accepted Answer

A) True 
 B)False

Question 5

SmartPhone Company's ad states that its product is "The Best that Money Can Buy." Because of this ad,the Federal Trade Commission is most likely to issue

Accepted Answer

A)  a cease-and-desist order.
B)  a counteradvertising order.
C)  a multiple product order.
D)  none of the choices.

Question 6

Spicy Salsa,Inc.,complains to the Federal Trade Commission (FTC)about an ad broadcast by Tangy Taco Sauce Company,Spicy Salsa'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)  draft a formal complaint.
C)  issue a cease-and-desist order.
D)  permit Spicy Salsa to broadcast similarly deceptive counteradvertising.

Question 7

Ultrahazard Removal & Disposal Corporation transports radioactive materials. Vincent,an Ultrahazard employee,is diagnosed with radiation sickness after exposure to the materials. Vincent's suit against Ultrahazard to recover for the injury is known as

Accepted Answer

A)  an environmental impact statement.
B)  a nuisance.
C)  a toxic tort.
D)  a hazardous substance response.

Question 8

In a transaction subject to the Truth-in-Lending Act,the terms of a credit instrument must be fully disclosed.

Accepted Answer

A) True 
 B)False

Question 9

Hearth & Home Furniture store advertises bedroom suites at a "Special Low Price of $599." When Ilene tries to buy one of the suites,Jill,the salesperson,tells her that they are all sold and no more are obtainable. Jill adds that Hearth & Home has other bedroom suites available for as low as $2,599. This is

Accepted Answer

A)  a cease-and-desist order.
B)  bait-and-switch advertising.
C)  counteradvertising.
D)  puffery.

Question 10

Bertha owns land located outside Centre City. Bertha sells the land to Disposal & Recycling,Inc.,which establishes a hazardous waste disposal facility at the site. Disposal & Recycling accepts only waste transported by Eco Trucking Inc. exclusively from Federated Industries,Inc. Several years later,Disposal & Recycling closes its facility and sells the land to Garden Variety Retail Corporation,which builds a Home & Yard store on the site. Meanwhile,some of Centre City's citizens complain to the Environmental Protection Agency (EPA)that the city's municipal water supply is polluted. The EPA investigates and discovers that the sources of the pollution are leaks of hazardous waste from what is now the Home & Yard site. The EPA cleans up the site. Who can be held liable for the cost of cleaning up the site? What standards must Centre City meet regarding the water?

Accepted Answer

The answer of Bertha owns land located outside Centre City....

Question 11

Bagels n' Pastries,Inc.,makes and sells a variety of bread products. Bagels n' Pastries'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 12

Puffery constitutes Advertising,Marketing,and Sales.

Accepted Answer

A) True 
 B)False

Question 13

Wellness Insurance Company offers health and medical insurance to consumers. Under current federal health-care laws,Wellness is prohibited from

Accepted Answer

A)  denying coverage for preexisting conditions.
B)  enabling more children to obtain health-insurance coverage.
C)  allowing adults under age twenty-six to remain on their parents' health insurance.
D)  ending lifetime and most annual limits on care.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

An environmental impact statement must be prepared for every major federal or state action that significantly affects the quality of the environment.

Accepted Answer

A) True 
 B)False

Question 16

Elise and many other consumers complain to the Federal Trade Commission (FTC)that a Faux Diamonds 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)  order restitution.

Question 17

Creditors attempting to collect debts are generally considered to be debt-collection agencies.

Accepted Answer

A) True 
 B)False

Question 18

Soundbites Corporation makes and markets cellphones. Soundbites's ad states that on its phones voices and text come through as "clear as the sky on a cloudless day." The Federal Trade Commission would consider this claim

Accepted Answer

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

Question 19

Public water systems operators must come as close as possible to meeting the Environmental Protection Agency's standards by using any available technology.

Accepted Answer

A) True 
 B)False

Question 20

The Food and Drug Administration must ensure the safety of new drugs.

Accepted Answer

A) True 
 B)False

Exam 39: Consumer and Environmental Law

Dina takes out a student loan from Earnest Bank. When she fails to make the scheduled payments for six months,Earnest advises her of further action that it will take. This is a violation of

Smelting & Refining Company generates solid waste considered hazardous. The company labels and packages properly all waste to be transported to a disposal site. Under the Resource Conservation and Recovery Act,this is most likely

Those who knowingly violate the Clean Air Act may be subject to criminal liability.

SmartPhone Company's ad states that its product is "The Best that Money Can Buy." Because of this ad,the Federal Trade Commission is most likely to issue

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

Ultrahazard Removal & Disposal Corporation transports radioactive materials. Vincent,an Ultrahazard employee,is diagnosed with radiation sickness after exposure to the materials. Vincent's suit against Ultrahazard to recover for the injury is known as

In a transaction subject to the Truth-in-Lending Act,the terms of a credit instrument must be fully disclosed.

Bagels n' Pastries,Inc.,makes and sells a variety of bread products. Bagels n' Pastries's product packages must include

Puffery constitutes Advertising,Marketing,and Sales.

Wellness Insurance Company offers health and medical insurance to consumers. Under current federal health-care laws,Wellness is prohibited from

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

An environmental impact statement must be prepared for every major federal or state action that significantly affects the quality of the environment.

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

Creditors attempting to collect debts are generally considered to be debt-collection agencies.

Soundbites Corporation makes and markets cellphones. Soundbites's ad states that on its phones voices and text come through as "clear as the sky on a cloudless day." The Federal Trade Commission would consider this claim

Public water systems operators must come as close as possible to meeting the Environmental Protection Agency's standards by using any available technology.

The Food and Drug Administration must ensure the safety of new drugs.