Question 1

The Consumer Product Safety Commission:

Accepted Answer

A)  only has the authority to educate the public concerning product safety problems. 
B)  uses data it gathers to set uniform product safety standards for goods such as toys and lawn mowers. 
C)  can only make manufacturers voluntarily submit their products for testing if the product falls below its regulatory standards. 
D)  has no enforcement powers since compliance with its regulations is left up to the manufacturer. 
A)  only has the authority to educate the public concerning product safety problems. 
B)  uses data it gathers to set uniform product safety standards for goods such as toys and lawn mowers. 
C)  can only make manufacturers voluntarily submit their products for testing if the product falls below its regulatory standards. 
D)  has no enforcement powers since compliance with its regulations is left up to the manufacturer. B

Question 2

Homemade Soup Co. has advertised their soup in certain magazines using photographs showing bowls of their soup but with pebbles at the bottom of the bowl. The pebbles were used to displace the soup in the bowl, forcing the vegetables and meat to the surface. This photographer's trick made the soup appear heartier than it was. An FTC staffer is thumbing through the latest edition of her favorite magazine. She notices the Homemade Soup Co. ad and goes to her kitchen, opens a can of Homemade's soup and decides that her bowl of soup looks nothing like the one in the ad. What are the steps the FTC would take to proceed against Homemade Soup Co.?

Accepted Answer

In a typical situation, the FTC discovers a potentially deceptive practice, investigates, files a complaint, has a hearing in front of an Administrative Law Judge (ALJ) to determine if a violation of the law has actually occurred, and obtains a cease and desist order if the ALJ finds that one is necessary. The respondent may appeal to the FTC commissioners to reverse or modify the order.

Question 3

The Fair Credit Reporting Act has to do with:

Accepted Answer

A)  allowing consumers to get their own credit report at no cost once a year 
B)  credit checks done by potential lenders. 
C)  reports made by credit agencies. 
D)  All of these. 
A)  allowing consumers to get their own credit report at no cost once a year 
B)  credit checks done by potential lenders. 
C)  reports made by credit agencies. 
D)  All of these. D

Question 4

Most lemon laws define a lemon as a car that:

Accepted Answer

A)  was sold by a dealer who refuses to make reasonable attempts to correct the problem. 
B)  continues to have a defect that substantially impairs its use, value, or safety, even after the manufacturer has made reasonable attempts to correct the problem. 
C)  has been unpopular and so is sold at a discounted price. 
D)  a manufacturer must destroy so that it cannot be sold to other unsuspecting consumers. 
A)  was sold by a dealer who refuses to make reasonable attempts to correct the problem. 
B)  continues to have a defect that substantially impairs its use, value, or safety, even after the manufacturer has made reasonable attempts to correct the problem. 
C)  has been unpopular and so is sold at a discounted price. 
D)  a manufacturer must destroy so that it cannot be sold to other unsuspecting consumers.

Question 5

Discrimination based on in the extension of credit is prohibited under the Equal Credit Opportunity Act.

Accepted Answer

A)  sex or marital status 
B)  religion or national origin 
C)  race or age 
D)  All of these. 
A)  sex or marital status 
B)  religion or national origin 
C)  race or age 
D)  All of these.

Question 6

Under the FCCPA, the liability of a credit card holder for another's unauthorized use of the card is limited to:

Accepted Answer

A)  $500. 
B)  $100. 
C)  $50. 
D)  None of these; liability is unlimited. 
A)  $500. 
B)  $100. 
C)  $50. 
D)  None of these; liability is unlimited.

Question 7

The Fair Debt Collection Practices Act applies directly to creditors.

Accepted Answer

A) True 
 B)False

Question 8

The FTC policy statement addressing the meaning of unfairness provides that an injury is unfair if it is:

Accepted Answer

A)  likely to mislead the consumer. 
B)  substantial and not outweighed by any benefits to consumers or competition. 
C)  one that the seller could reasonably have avoided. 
D)  All of these. 
A)  likely to mislead the consumer. 
B)  substantial and not outweighed by any benefits to consumers or competition. 
C)  one that the seller could reasonably have avoided. 
D)  All of these.

Question 9

Which of the following is not true about the Home Mortgage Disclosure Act?

Accepted Answer

A)  It was enacted to emphasize to financial institutions the importance of their reinvesting funds in the communities they serve. 
B)  It was enacted to put redlining into effect. 
C)  It outlawed geographic discrimination. 
D)  It requires public disclosure of the financial institution's geographic pattern of mortgage lending. 
A)  It was enacted to emphasize to financial institutions the importance of their reinvesting funds in the communities they serve. 
B)  It was enacted to put redlining into effect. 
C)  It outlawed geographic discrimination. 
D)  It requires public disclosure of the financial institution's geographic pattern of mortgage lending.

Question 10

If the FTC rules that a seller has made a false or deceptive advertising statement, the Commission:

Accepted Answer

A)  has no power to address the practice. 
B)  can require the seller to make additional advertisements to correct it. 
C)  can require the company to go out of business. 
D)  can report the company to the President of the United States for deregulation. 
A)  has no power to address the practice. 
B)  can require the seller to make additional advertisements to correct it. 
C)  can require the company to go out of business. 
D)  can report the company to the President of the United States for deregulation.

Question 11

Most states would invalidate prepayment penalties.

Accepted Answer

A) True 
 B)False

Question 12

In order for advertising to be found deceptive by the FTC, it is necessary that:

Accepted Answer

A)  the advertisement can only be reasonably interpreted in one way, and in that way, it is misleading. 
B)  there is a misrepresentation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer's detriment. 
C)  the sellers have malice or evil intent. 
D)  something affirmative was said which was misleading; i.e., an omission cannot be deceptive. 
A)  the advertisement can only be reasonably interpreted in one way, and in that way, it is misleading. 
B)  there is a misrepresentation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer's detriment. 
C)  the sellers have malice or evil intent. 
D)  something affirmative was said which was misleading; i.e., an omission cannot be deceptive.

Question 13

Hazardous materials are specifically exempted from the jurisdiction of the Consumer Product Safety Commission.

Accepted Answer

A) True 
 B)False

Question 14

In order to violate the FTC rules on advertising, a product would have to be affirmatively mislabeled.

Accepted Answer

A) True 
 B)False

Question 15

The is empowered to issue industry-wide safety standards for consumer products.

Accepted Answer

A)  UCCC 
B)  RESPA 
C)  FCCPA 
D)  CPSC 
A)  UCCC 
B)  RESPA 
C)  FCCPA 
D)  CPSC

Question 16

Under Truth-in-Lending, the cost of consumer credit must be expressed in an:

Accepted Answer

A)  appreciated payment rate. 
B)  annual percentage rate. 
C)  appraisal payment ratio. 
D)  allocated procedures remedy. 
A)  appreciated payment rate. 
B)  annual percentage rate. 
C)  appraisal payment ratio. 
D)  allocated procedures remedy.

Question 17

A consumer transaction would include one in which the purchaser uses the item at a hotel while on vacation.

Accepted Answer

A) True 
 B)False

Question 18

The National Highway Traffic Safety Administration:

Accepted Answer

A)  seeks recalls on autos for safety reasons. 
B)  tests the fuel efficiency of each year's car models. 
C)  enforces trademark laws on cars and car parts to ensure buyers get what they think they are buying. 
D)  None of these are correct. 
A)  seeks recalls on autos for safety reasons. 
B)  tests the fuel efficiency of each year's car models. 
C)  enforces trademark laws on cars and car parts to ensure buyers get what they think they are buying. 
D)  None of these are correct.

Question 19

Which of the following would NOT be considered to be an example of open-ended credit?

Accepted Answer

A)  A gasoline credit card account 
B)  A VISA account 
C)  A real estate mortgage account 
D)  A department store credit card account 
A)  A gasoline credit card account 
B)  A VISA account 
C)  A real estate mortgage account 
D)  A department store credit card account

Question 20

The Federal Trade Commission enforces antitrust legislation.

Accepted Answer

A) True 
 B)False

Exam 41: Consumer Protection

The Consumer Product Safety Commission:

The Fair Credit Reporting Act has to do with:

Most lemon laws define a lemon as a car that:

Discrimination based on in the extension of credit is prohibited under the Equal Credit Opportunity Act.

Under the FCCPA, the liability of a credit card holder for another's unauthorized use of the card is limited to:

The Fair Debt Collection Practices Act applies directly to creditors.

The FTC policy statement addressing the meaning of unfairness provides that an injury is unfair if it is:

Which of the following is not true about the Home Mortgage Disclosure Act?

If the FTC rules that a seller has made a false or deceptive advertising statement, the Commission:

Most states would invalidate prepayment penalties.

In order for advertising to be found deceptive by the FTC, it is necessary that:

Hazardous materials are specifically exempted from the jurisdiction of the Consumer Product Safety Commission.

In order to violate the FTC rules on advertising, a product would have to be affirmatively mislabeled.

The is empowered to issue industry-wide safety standards for consumer products.

Under Truth-in-Lending, the cost of consumer credit must be expressed in an:

A consumer transaction would include one in which the purchaser uses the item at a hotel while on vacation.

The National Highway Traffic Safety Administration:

Which of the following would NOT be considered to be an example of open-ended credit?

The Federal Trade Commission enforces antitrust legislation.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

the Legal Environment of Business

Contracts

Agency

Sales

Negotiable Instruments

Unincorporated Business Associations

Corporations

Debtor and Creditor Relations

Regulation of Business

Property

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