Question 1

Regulations are often effect at safeguarding consumers, but there are exceptions. Give an example of one.

Accepted Answer

Regulations are typically designed to protect consumers by ensuring that products and services meet certain safety and quality standards. However, there are instances where regulations may not effectively safeguard consumers, or may even have unintended negative consequences. One example of such an exception is the phenomenon known as "regulatory capture."

Regulatory capture occurs when a regulatory agency, which is established to act in the public's interest, ends up being dominated by the industries it is supposed to regulate. This can happen when industry representatives or lobbyists exert undue influence over the regulators, leading to the creation of rules and standards that favor the industry's interests over those of the consumers.

For instance, if a regulatory body overseeing the pharmaceutical industry is heavily influenced by pharmaceutical companies, it might approve drugs with insufficient testing or overlook side effects, prioritizing the industry's profitability over patient safety. This can lead to consumers being exposed to medications that are not as safe as they should be, undermining the very purpose of the regulations.

Another example could be found in the financial sector. Before the financial crisis of 2007-2008, regulations existed to oversee banks and financial institutions. However, some of these regulations were not stringent enough or were not enforced adequately, in part due to the close relationship between regulators and the financial industry. This lack of effective oversight contributed to risky lending practices and the eventual collapse of major financial institutions, which had severe consequences for consumers and the global economy.

In both examples, the intent of regulations to protect consumers was compromised, illustrating that while regulations are often effective at safeguarding consumer interests, there are exceptions where they may fail to do so due to factors like regulatory capture or inadequate enforcement.

Question 2

If we accept the principle of "caveat emptor" - "let the buyer beware,"  why then is there concern about the ethics of advertising. If the consumer is responsible to make the decision, is there anything to justify restricting the advertiser?  Explain your view.

Accepted Answer

The principle of "caveat emptor" places the responsibility on the buyer to be aware and cautious when making purchasing decisions. However, there is still concern about the ethics of advertising because advertisers have the power to influence and manipulate consumer perceptions and choices.

While it is true that consumers ultimately have the responsibility to make informed decisions, there are several reasons to justify restricting advertisers. Firstly, not all consumers have the same level of knowledge or ability to critically evaluate advertising claims. Advertisers have the ability to use persuasive techniques and misleading information to exploit vulnerable or uninformed consumers. This can lead to unfair and deceptive practices that harm consumers.

Additionally, advertising has the potential to create societal harm by promoting harmful products or perpetuating harmful stereotypes. For example, advertising for unhealthy foods or addictive substances can contribute to public health issues, and advertising that perpetuates gender or racial stereotypes can have negative social implications.

Furthermore, restricting advertisers can help maintain a fair and competitive marketplace. Without regulations, advertisers could engage in unfair practices such as false or misleading advertising, which could harm both consumers and honest competitors.

In conclusion, while consumers do have a responsibility to make informed decisions, there are valid reasons to justify restricting advertisers. By implementing ethical standards and regulations, we can protect consumers from deceptive practices, promote social responsibility, and maintain a fair marketplace.

Question 3

Harvard business professor Theodore Levitt has

Accepted Answer

A) drawn an analogy between advertising and art. 
B) proven the possibility of effective subliminal advertising. 
C) argued that the process of production today creates the very wants it then satisfies. 
D) invented the concept of "puffery". 
A) drawn an analogy between advertising and art. 
B) proven the possibility of effective subliminal advertising. 
C) argued that the process of production today creates the very wants it then satisfies. 
D) invented the concept of "puffery". A

Question 4

Business's responsibility for understanding and providing for consumer needs derives from the fact that citizen-consumers are dependent on business to satisfy their needs.

Accepted Answer

A) True 
 B)False

Question 5

The case of FTC v. Standard Education was important in the legal transition

Accepted Answer

A) toward the principle of caveat emptor. 
B) away from the reasonable-person standard. 
C) toward the reasonable-person standard. 
D) that removed power from the Federal Trade Commission (FT
C) . 
A) toward the principle of caveat emptor. 
B) away from the reasonable-person standard. 
C) toward the reasonable-person standard. 
D) that removed power from the Federal Trade Commission (FT
C) .

Question 6

Give an example of labeling or packaging that is deceptive or misleading.

Accepted Answer

One example of deceptive labeling or pac

Question 7

The Federal Trade Commission (FTC)was established over seventy-five years ago to protect consumers against deceptive advertising.

Accepted Answer

A) True 
 B)False

Question 8

Advertising is best known for

Accepted Answer

A) the persuasion to purchase the product. 
B) the information about goods and services. 
C) the information about prices. 
D) the objectivity of the view of the product. 
A) the persuasion to purchase the product. 
B) the information about goods and services. 
C) the information about prices. 
D) the objectivity of the view of the product.

Question 9

The FTC now follows the "modified" ignorant consumer standard and protects only those cases of foolishness that are committed by significant numbers of people.

Accepted Answer

A) True 
 B)False

Question 10

In deciding whether an ad is deceptive, today the FTC basically follows

Accepted Answer

A) the reasonable consumer standard. 
B) the gullible consumer standard. 
C) the "modified" gullible-consumer standard. 
D) none of the above. 
A) the reasonable consumer standard. 
B) the gullible consumer standard. 
C) the "modified" gullible-consumer standard. 
D) none of the above.

Question 11

The controversy over legal paternalism pits the values of individual freedom and autonomy against social welfare.

Accepted Answer

A) True 
 B)False

Question 12

What is the importance of the 1916 case of MacPherson v. Buick Motor Car ?

Accepted Answer

The 1916 case of MacPherson v. Buick Mot

Question 13

Defenders of advertising claim that, despite criticisms, advertising enjoys protection under the first Amendment as a form of speech.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following consumer goods is responsible for the greatest number of individual social ills?

Accepted Answer

A) alcohol 
B) cars 
C) cigarettes 
D) handguns 
A) alcohol 
B) cars 
C) cigarettes 
D) handguns

Question 15

According to Galbraith's "dependence effect",

Accepted Answer

A) production depends upon wants. 
B) advertising depends on the wants of the consumer. 
C) consumer demand tends to be shaped by the production process. 
D) advertising depends on consumerism. 
A) production depends upon wants. 
B) advertising depends on the wants of the consumer. 
C) consumer demand tends to be shaped by the production process. 
D) advertising depends on consumerism.

Question 16

Strict product liability is the doctrine that the seller of a product has legal responsibilities to compensate the user of that product for injuries suffered due to a defective aspect of the product, even though the seller has not been negligent in permitting that defect to occur.

Accepted Answer

A) True 
 B)False

Question 17

Subliminal advertising is advertising that supposedly communicates at a level beneath our conscious awareness.

Accepted Answer

A) True 
 B)False

Question 18

Before the case of MacPherson v. Buick Motor Car in 1916, injured consumers could only recover damages from the retailer of the defective product.

Accepted Answer

A) True 
 B)False

Question 19

To properly protect consumers,

Accepted Answer

A) tests of a product can safely assume that the product will be used in just the way that the manufacturer intends it to be used. 
B) accidents occur exclusively as a result of product misuse. 
C) if a product poses a potential, serious threat, a company may need to take extraordinary measures to ensure continued safe use of it. 
D) only new products, not established products, need to be tested. 
A) tests of a product can safely assume that the product will be used in just the way that the manufacturer intends it to be used. 
B) accidents occur exclusively as a result of product misuse. 
C) if a product poses a potential, serious threat, a company may need to take extraordinary measures to ensure continued safe use of it. 
D) only new products, not established products, need to be tested.

Question 20

What is due care?

Accepted Answer

Due care refers to the effort made by an

Regulations are often effect at safeguarding consumers, but there are exceptions. Give an example of one.

If we accept the principle of "caveat emptor" - "let the buyer beware," why then is there concern about the ethics of advertising. If the consumer is responsible to make the decision, is there anything to justify restricting the advertiser? Explain your view.

Harvard business professor Theodore Levitt has

Business's responsibility for understanding and providing for consumer needs derives from the fact that citizen-consumers are dependent on business to satisfy their needs.

The case of FTC v. Standard Education was important in the legal transition

Give an example of labeling or packaging that is deceptive or misleading.

The Federal Trade Commission (FTC)was established over seventy-five years ago to protect consumers against deceptive advertising.

Advertising is best known for

The FTC now follows the "modified" ignorant consumer standard and protects only those cases of foolishness that are committed by significant numbers of people.

In deciding whether an ad is deceptive, today the FTC basically follows

The controversy over legal paternalism pits the values of individual freedom and autonomy against social welfare.

What is the importance of the 1916 case of MacPherson v. Buick Motor Car ?

Defenders of advertising claim that, despite criticisms, advertising enjoys protection under the first Amendment as a form of speech.

Which of the following consumer goods is responsible for the greatest number of individual social ills?

According to Galbraith's "dependence effect",

Strict product liability is the doctrine that the seller of a product has legal responsibilities to compensate the user of that product for injuries suffered due to a defective aspect of the product, even though the seller has not been negligent in permitting that defect to occur.

Subliminal advertising is advertising that supposedly communicates at a level beneath our conscious awareness.

Before the case of MacPherson v. Buick Motor Car in 1916, injured consumers could only recover damages from the retailer of the defective product.

To properly protect consumers,

What is due care?

The Nature of Morality

Normative Theories of Ethics

Justice and Economic Distribution

The Nature of Capitalism

Corporations

The Environment

The Workplace Basic Issues

The Workplace Today Apos S Challenges

Moral Choices Facing Employees

Job Discrimination

Filters

Exam 6: Consumers

Regulations are often effect at safeguarding consumers, but there are exceptions. Give an example of one.

If we accept the principle of "caveat emptor" - "let the buyer beware," why then is there concern about the ethics of advertising. If the consumer is responsible to make the decision, is there anything to justify restricting the advertiser? Explain your view.

Harvard business professor Theodore Levitt has

Business's responsibility for understanding and providing for consumer needs derives from the fact that citizen-consumers are dependent on business to satisfy their needs.

The case of FTC v. Standard Education was important in the legal transition

Give an example of labeling or packaging that is deceptive or misleading.

The Federal Trade Commission (FTC)was established over seventy-five years ago to protect consumers against deceptive advertising.

Advertising is best known for

The FTC now follows the "modified" ignorant consumer standard and protects only those cases of foolishness that are committed by significant numbers of people.

In deciding whether an ad is deceptive, today the FTC basically follows

The controversy over legal paternalism pits the values of individual freedom and autonomy against social welfare.

What is the importance of the 1916 case of MacPherson v. Buick Motor Car ?

Defenders of advertising claim that, despite criticisms, advertising enjoys protection under the first Amendment as a form of speech.

Which of the following consumer goods is responsible for the greatest number of individual social ills?

According to Galbraith's "dependence effect",

Strict product liability is the doctrine that the seller of a product has legal responsibilities to compensate the user of that product for injuries suffered due to a defective aspect of the product, even though the seller has not been negligent in permitting that defect to occur.

Subliminal advertising is advertising that supposedly communicates at a level beneath our conscious awareness.

Before the case of MacPherson v. Buick Motor Car in 1916, injured consumers could only recover damages from the retailer of the defective product.

To properly protect consumers,

What is due care?

The Nature of Morality

Normative Theories of Ethics

Justice and Economic Distribution

The Nature of Capitalism

Corporations

The Environment

The Workplace Basic Issues

The Workplace Today Apos S Challenges

Moral Choices Facing Employees

Job Discrimination

Filters