Deck 17: Consumer Protection

Question 1

The U.S.Department of Agriculture inspects facilities engaged in egg production.

Answer 1

True

Question 2

The Fair Debt Collection Practices Act applies only to third-party debt collectors.

Answer 2

True

Question 3

The Wool Products Labeling Act is an example of a federal law regulating the labeling of clothing.

Answer 3

True

Question 4

State laws regulating genetically modified food are typically declared unconstitutional on the basis that they are preempted by federal law.

Question 5

The Truth-in-Lending Act (TILA)is intended to assure a truthful loan application by the consumer.

Question 6

A car loan is an example of a closed-end credit transaction.

Question 7

Generic drugs can be approved for use on a showing that they are identical to approved brand-name drugs.

Question 8

The Truth-in-Lending Act limits credit card liability to $50 per card for unauthorized charges made before a card issuer is notified of a lost or stolen card.

Question 9

In general,consumer protection law at the state level is more stringent than federal law.

Question 10

The labeling of medical devices is under the jurisdiction of the Food and Drug Administration.

Question 11

If a used car is sold without a warranty,the label must state that the car is being sold "as is."

Question 12

Congress has made it a federal crime to engage in the extortionate extension of credit.

Question 13

Courts usually consider advertisements to be only an offer to deal.

Question 14

Executive branch regulatory agencies are located in cabinet departments.

Question 15

Unsolicited merchandise sent by U.S.mail may be kept by the recipient without incurring any obligation to the sender.

Question 16

Under the Magnuson-Moss Warranty Act,a seller who offers a written warranty on goods must provide a full warranty.

Question 17

The U.S.Supreme Court has ruled that compounded drugs are illegal.

Question 18

The Federal Commerce Commission has adopted guidelines specifying when manufacturers and marketers can label their products "Made in USA."

Question 19

State may regulate odometer tampering,but there is no federal law that does so.

Question 20

The Fair Credit Reporting Act does not give consumers a right to have corrected copies of their credit reports sent to creditors.

Question 21

Which of the following is true regarding USDA standards for organic food?

A) Neither pesticides, genetic engineering, growth hormones, nor irradiation may be used.
B) Pesticides may be used, but genetic engineering and the use of growth hormones is disallowed.
C) Pesticides and irradiation may not be used, but genetic engineering and the use of growth hormones is allowed.
D) The USDA has no standards for organic food.

Question 22

The Federal Trade Commission has ________commissioners who serve for _______-year terms.

A) seven, four
B) ten, five
C) six, six
D) five, seven

Question 23

Which of the following is true regarding the labeling of food imported into the U.S.?

A) Labeling of food imports is not required on the part of grocery stores or restaurants.
B) All grocery stores must label certain products, including unprocessed beef and pork, with the country of origin; but restaurants are exempt.
C) Grocery stores and restaurants, with no exceptions, must inform customers of the country of origin of certain products including beef and pork.
D) Grocery stores must label certain products, including unprocessed beef and pork, with the country of origin; but restaurants and some retail grocery stores with sales under a certain amount are exempt.

Question 24

In relation to food,which of the following is considered an additive?

A) Pesticide residue
B) Unintended environmental contaminants
C) Substances unavoidably added from packaging
D) Pesticide residue, unintended environmental contaminants, and substances unavoidably added from packaging

Question 25

The Truth-in-Lending Act provides consumers a right of ________ whenever their home is used as collateral for credit except for original construction or acquisition.

A) rescission
B) redemption
C) new mortgage
D) refinance

Question 26

Which of the following was the result at the U.S.Supreme Court Level in Monsanto Co.v.Geertson Seed Farms,the case in the text challenging a district courts issuance of an injunction prohibiting the deregulation and use of Roundup Ready Alfalfa (RRA),an alfalfa plant genetically engineered to be tolerant of the active ingredient in Roundup?

A) That the plaintiffs lacked standing to sue and that the case was subject to dismissal on that ground alone.
B) That the district court properly issued a permanent injunction prohibiting the deregulation of RRA in whole or in part.
C) That the plaintiffs had standing but that the district court improperly issued an injunction prohibiting any deregulation whatsoever of RRA.
D) That the plaintiffs lacked standing and that the district court properly issued a permanent injunction prohibiting the deregulation of RRA in whole or in part.

Question 27

Caveat emptor means,

A) "let the buyer beware."
B) "let the buyer prevail."
C) "let the market decide."
D) "let the seller beware."

Question 28

Which of the following categories of drugs cannot be approved by the Food and Drug Administration?

A) Schedule 1
B) Schedule C
C) Schedule 2
D) Schedule
D)

Question 29

The _________ has the primary responsibility for regulating the packaging and labeling of commodities other than food,drugs,medical devices,and cosmetics.

A) Federal Commerce Commission
B) Federal Interstate Regulating Commission
C) Federal Trade Commission
D) Uniform Commodity Commission

Question 30

The Food and Drug Administration shares with the _________ the responsibility for regulating pesticide residues on food.

A) Department of Agriculture.
B) Department of Insecticide.
C) Federal Trade Commission.
D) Environmental Protection Agency.

Question 31

The Equal Credit Opportunity Act originally intended to prevent discrimination against ________ in the advancement of credit.

A) religion
B) age
C) women
D) color

Question 32

Before implementing a mandatory safety standard,the Consumer Product Safety Commission must find that ________ are inadequate.

A) voluntary standards
B) safety guidelines
C) product designs
D) warnings

Question 33

Which of the following is true regarding bioengineered insects and pathogens?

A) They are outlawed.
B) The Environmental Protection agency issues permits for bioengineered insects but bioengineered pathogens are outlawed.
C) The Environmental Protection agency issues permits for bioengineered pathogens but bioengineered insects are outlawed.
D) The Environmental Protection Agency issues permits for the use of bioengineered insects and pathogens.

Question 34

Which of the following is true regarding the 2011 Food Safety Modernization Act?

A) It developed an electronic tracking system to follow food from the farm to the dinner table.
B) It is one of several major overhauls of the FDA in the last several years.
C) It recognizes that importers are not required to verify food safety in regard to food from other countries.
D) It is one of several major overhauls of the FDA in the last several years, and it recognizes that importers are not required to verify food safety in regard to food from other countries.

Question 35

The Consumer Credit Protection Act limits the garnishment of wages to the lesser of _____ of the debtor's disposable earnings for the week or the amount by which disposable earnings for the week exceed _____ times the current federal minimum hourly wage.

A) 10%, 30
B) 25%, 30
C) 30%, 25
D) 35%, 40

Question 36

In a _________,the seller offers the buyer a commission,rebate,or discount for furnishing the seller with a list of additional prospective customers.

A) pyramid sale
B) referral sale
C) commission sale
D) rebate sale

Question 37

Which of the following is true regarding the use of genetically modified foods internationally?

A) The European Parliament refused to approve legislation requiring the labeling of genetically modified foods.
B) Australia requires the labeling of genetically modified food, but New Zealand does not.
C) New Zealand requires the labeling of genetically modified food, but Australia does not.
D) The European Parliament required the labeling of genetically modified foods, and Australia and New Zealand also require the labeling of genetically modified foods.

Question 38

The FTC now requires used car sellers to affix a ________ to the cars that they sell.

A) fixed price
B) buyer's guide
C) base price
D) discount price

Question 39

Caveat venditor means,

A) "let the buyer beware."
B) "le the buyer prevail."
C) "let the market decide."
D) "let the seller beware."

Question 40

Which of the following is true regarding the use of irradiated foods in the U.S.?

A) Irradiated foods are outlawed.
B) Irradiation is allowed only for fruits and vegetables, and no notice is required.
C) Irradiation is allowed for fresh and frozen red meat, and no notice is required.
D) Irradiation is allowed for fresh and frozen red meat, but notice must be required.

Question 41

________ is the legal procedure by which a creditor may collect a debt by attaching a portion of a debtor's weekly wages.

A) Rescission
B) Garnishment
C) Joinder
D) Attachment

Question 42

Bobby develops a way to clone catfish. He finds that this is a very economical way to run his fish business. He begins selling the catfish to grocers in the area. Other fish producers,who do not know how to clone the fish,are very annoyed with Bobby and start to complain. They tell Bobby that he is violating federal law by not placing a label on his fish notifying consumes that the fish are cloned. Is Bobby in violation of the law?

A) Bobby is not in violation of federal law, but he should check to see if his state has such a requirement because labeling legislation has been introduce in some states.
B) Bobby is not in violation of federal law nor have any states made any effort to require notification of cloned products.
C) Bobby is in violation of federal law by not notifying consumers through labeling of the cloning.
D) Bobby is in violation of federal law by not notifying consumers through labeling of the cloning only if there is evidence that the nutritional value of the fish is less than that of noncloned fish.

Question 43

What is the purpose of the Truth-in-Lending Act? What does it provide regarding the liability of credit cardholders for unauthorized charges when a card is lost or stolen?

Question 44

Which of the following is true regarding FDA approval of drug labels in relation to state law claims for failure to warn?

A) FDA approval of the label on a brand-name prescription drug does not preempt state failure-to-warn claims arising out of injuries caused by the drug nor does FDA approval of the label preempt state failure-to-warn claims related to approved generic drugs bearing the FDA-mandated label.
B) FDA approval of the label on a brand-name prescription drug preempts state failure-to-warn claims arising out of injuries caused by the drug, and federal law also preempts state failure-to-warn claims related to approved generic drugs as long as they bear the FDA-mandated label.
C) FDA approval of the label on a brand-name prescription drug preempts state failure-to-warn claims arising out of injuries caused by the drug, but federal law does not preempt state failure-to-warn claims related to approved generic drugs bearing the FDA-mandated label.
D) FDA approval of the label on a brand-name prescription drug does not preempt state failure-to-warn claims arising out of injuries caused by the drug, but federal law preempts state failure-to-warn claims related to approved generic drugs as long as they bear the FDA-mandated label.

Question 45

The ________ controls the disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available and avoid the uninformed use of credit.

A) Fair Credit Billing Act
B) Equal Credit Opportunity Act
C) Fair Credit Reporting Act
D) Truth-in-Lending Act

Question 46

Set forth the four main provisions of the CAN-SPAM Act.

Question 47

Fact Pattern 17-1
Cream X has been approved by the Food and Drug Administration for the treatment of eczema. Dr. Glover discovers, however, that it is also great for a number of other things including the removal of wrinkles and cellulite. The cream is applied to the skin, not ingested. He starts prescribing it for those purposes and has a great increase in patients. Dr. Smith starts to lose a number of patients to Dr. Glover and becomes grumpy when she hears why Dr. Glover is gaining in popularity. Dr. Smith decides to complain about the practice but does not know quite what to do about it.
Refer to fact pattern 17-1. Which of the following is the appropriate term for Dr.Glover's prescribing of Cream X for the elimination of wrinkles and cellulite?

A) Compounding use
B) Non-acknowledged use
C) Derivative use
D) Off-label use

Question 48

Fact Pattern 17-1
Cream X has been approved by the Food and Drug Administration for the treatment of eczema. Dr. Glover discovers, however, that it is also great for a number of other things including the removal of wrinkles and cellulite. The cream is applied to the skin, not ingested. He starts prescribing it for those purposes and has a great increase in patients. Dr. Smith starts to lose a number of patients to Dr. Glover and becomes grumpy when she hears why Dr. Glover is gaining in popularity. Dr. Smith decides to complain about the practice but does not know quite what to do about it.
Refer to fact pattern 17-1. Which of the following is true regarding the legality of Dr.Glover prescribing Cream X for the elimination of wrinkles and cellulite?

A) It is legal, and the Food and Drug Administration would take no action against him.
B) It is legal only because the cream is not ingested.
C) It is legal only because Dr. Glover is using it for cosmetic reasons.
D) It is illegal.

Question 49

Which of the following is true regarding the placement of health claims for foods on labels?

A) The FDA permits health food claims on labels without FDA approval as a new drug or the risk of sanctions for issuing a misbranded product, as long as the claim has been certified by the FDA as being supported by significant scientific agreement.
B) The FDA disallows health food claims on labels unless the food has been approved by the FDA as a type of new drug for the health concern involved.
C) The FDA allows health food claims on labels so long as the claim has not been certified by the FDA as false and misleading.
D) The FDA allows health food claims on labels without prior approval of the FDA only for organically grown foods.

Question 50

The first step in the FDA approval process for new drugs is their classification by the ________ based on currently accepted medical use and potential for abuse.

A) National Institute of Health
B) The Consumer Product Safety Commission
C) Drug Enforcement Administration
D) Congress

Question 51

Drug Company X has a prescription drug that will make people look younger and lose weight. The problem is that it causes significant stomach problems. Ann,an executive of Drug Company X,wants to advertise the drug's benefits on television and radio but leave out the stomach problems. Her secretary,Bob,tells her that she could run into problems,and that he is not sure the drug can even be advertised. Ann disagrees stating that it is up to physicians to warn patients of possible complications. She tells Bob that she will not provide any information regarding contacting Company X so that no one at Company X will be annoyed by receiving numerous inquiries about obtaining the drug's benefits. What would an FDA representative likely say in regard to Ann's plan? Set forth your response in detail.

Question 52

Which of the following are protected categories under the Equal Credit Opportunity Act?

A) gender, race, color, religion, and national origin
B) gender, race, color, religion, national origin, and age
C) gender, marital status, race, color, religion, national origin, and age
D) gender, marital status, race, color, religion, national origin, age, and residents of disadvantaged neighborhoods.

Question 53

Set forth the definitions used for determining whether an item is a food or a drug for purposes of FDA categorization.

Question 54

Which of the following is true regarding environmental standards in the European Union?

A) America is increasingly replacing the European Union as the leader in environmental development.
B) European Union policy requires significant producer accountability, placing the burden of environmental responsibility on the manufacturer.
C) American firms are not required to conform to European Union product rules in order to sell their products in Europe.
D) The European Union applies the prevention principle by which uncertainty is a reason to forego environmental protections.

Question 55

In general,the FDA will require prescription use only when a drug is _______.

A) Toxic, requires a physician's supervision for safe use, or is addictive.
B) Only if the drug is toxic.
C) Only if the drug is either toxic or requires a physician's supervision for safe use.
D) Only if the drug is addictive or requires a physician's supervision for safe use.

Question 56

Discuss the purpose of the purpose of the Consumer Product Safety Commission and the process by which it sets mandatory safety standards.Discuss fully.

Question 57

The ________ has primary responsibility for regulating the labeling of food

A) Federal Trade Commission
B) Food and Drug Administration
C) The Consumer Product Safety Commission
D) The Federal Trade Commission

Question 58

Which of the following was the result on appeal in Lavie v.Procter & Gamble Co.,the case in the text involving the plaintiff who claimed that by advertising that Aleve was gentler on the stomach than aspirin,the defendant implied that Aleve would not cause any stomach upset?

A) The court upheld dismissal of the complaint recognizing that even if an advertisement targets a disadvantaged or vulnerable group, it is judged by the effect it would have on a reasonable consumer.
B) The court upheld dismissal of the complaint recognizing that unless an advertisement targets a disadvantaged or vulnerable group, it is judged by the effect it would have on a reasonable consumer.
C) The court ruled that the plaintiff was entitled to a jury trial because the advertisement was not based on what the lease sophisticated consumer would think as it should have been.
D) The court ruled that the plaintiff was entitled to a jury trial because, regardless of the standard involved, the defendant should have stated that the drug could cause stomach upset.

Question 59

Fact Pattern 17-2
Janie is a pharmacist in Small City. At the direction of several physicians in Small City, she begins mixing up a treatment for indigestion that is prescribed by the physicians. She advertises the mixture, and she and prescribing physicians see a large increase in business. Other pharmacists who do not want to bother with mixing begin to complain. Janie takes the position that it is a free country, and she can do as she pleases since there is no evidence that the mixture is harmful; and it is particularly helpful for those individuals who have had reactions to other indigestion medication.
Refer to fact pattern 17-2. Is it legal for her to advertise the product?

A) No
B) Only if it has been approved by the Food and Drug Administration
C) Only if it is sold for under $50
D) Yes

Question 60

Fact Pattern 17-2
Janie is a pharmacist in Small City. At the direction of several physicians in Small City, she begins mixing up a treatment for indigestion that is prescribed by the physicians. She advertises the mixture, and she and prescribing physicians see a large increase in business. Other pharmacists who do not want to bother with mixing begin to complain. Janie takes the position that it is a free country, and she can do as she pleases since there is no evidence that the mixture is harmful; and it is particularly helpful for those individuals who have had reactions to other indigestion medication.
Refer to fact pattern 17-2. Which of the following is the term that best describes the process Janie uses in preparing the drug?

A) Combining
B) Compounding
C) Integrating
D) Servicing

Question 61

When does an advertiser violate the Federal Trade Commission bait and switch advertising rules?