Deck 8: Marketing Ethics: Advertising and Digital Marketing

Question 1

Which ethical question is not relevant to the process of marketing a product?

A)What responsibility do producers have for the quality and safety of their products?
B)Who is responsible for harms caused by a product?
C)Is the customer's willingness to pay the only ethical constraint on fair pricing?
D)Can producers discriminate in favor of, or against, some consumers?
E)All of the answers are correct.
F)None of the answers are correct.

Answer 1

None of the answers are correct.

Question 2

Identify the statement that fails to reinforce the idea that the purchases made by consumers may not be truly voluntary.

A)The more the consumers need a product, the less free they are to choose.
B)The consumer may experience anxiety and stress, for example, when purchasing an automobile.
C)Price fixing and price gouging may restrict the consumer's freedom.
D)There may be marketing practices aimed at vulnerable populations such as children or the elderly.
E)All of the answers are correct.
F)None of the answers are correct.

Answer 2

None of the answers are correct.

Question 3

Select the statement that represents a situation where informed consent is not operative.

A)The complexity of a product has been fully explained to a consumer.
B)The customer is not clear about the calculation of the interest rate on a leased product transaction.
C)The extended warranty conditions on a product have been fully disclosed to a consumer.
D)Warning labels on a product have pointed out any potential hazards associated with operating it.
E)All of the answers are correct.
F)None of the answers are correct.

Answer 3

The customer is not clear about the calculation of the interest rate on a leased product transaction.

Question 4

Choose the statement that does not challenge the assumptions commonly found in economic textbooks that customers are benefited, almost by definition, whenever their preferences are satisfied in the market.

A)Impulse buying cannot be justified by appeal to consumer interests.
B)The exchange is prima facie ethically legitimate because it assumes that the individuals involved in the transaction act as free, autonomous agents capable of pursuing their own ends.
C)The ever-increasing number of bankruptcies suggests that consumers cannot purchase happiness.
D)Empirical studies provide evidence that greater consumption can lead to unhappiness.

Question 5

Select the question that is not relevant to the examination of business's responsibility for its products.

A)What caused an event to happen?
B)Who is to blame for any harms caused, who is liable?
C)What was the agent's motive?
D)Who was responsible for "caring for" a situation, accountable without any suggestion of culpability, fault, or blame?

Question 6

The strict product liability standard requires a manufacturer to compensate injured consumers:

A)only if it can be shown that the manufacturer was at fault in causing or failing to prevent a harm.
B)even if the manufacturer was not at fault, even if there was nothing the manufacturer could have done to prevent the harm.
C)only if the manufacturer used fraud or coercion at the time the contract for the product was agreed to by the consumer.
D)only if the product's features were described in a deceptive manner in advertising copy.

Question 7

Producers should be held strictly liable for harms caused by performance of products even if the said harms are not caused by their negligence. Which of the following statements does not challenge this view?

A)Strict liability adds significant hidden costs to every consumer product.
B)Strict liability places domestic producers at a competitive disadvantage with foreign businesses.
C)If it is unfair to penalize businesses for harms they couldn't prevent, it is equally unfair to penalize consumers for harms they could not prevent.
D)Strict liability discourages product innovation and encourages frivolous and expensive lawsuits.

Question 8

Identify the statements in which John McCall argues that strict liability is no more unfair than it would be to hold injured consumers accountable.

A)The consumer who is injured by a product is unfairly disadvantaged in the economic competition and is denied an equal opportunity to compete in the marketplace.
B)Assigning the costs for injuries caused by defective products to other consumers of the product and to the shareholders of the company is more appropriate than assigning the costs to the injured consumer or to society at large.
C)Compensation returns the parties to equal standing, and the economic competition can continue as a result.
D)By holding the manufacturer liable, the costs are passed on, ordinarily through increased liability insurance costs, to those who stand to benefit from the product.
E)A and C.
F)B and D.

Question 9

It is alleged that markets fail, in some situations, to insure a fair price and thereby limit consumers' freedom. Which statement does not support that allegation?

A)Sellers extract extraordinarily high prices in situations where consumers have few options for obtaining a needed product.
B)From the utilitarian perspective, consumers are always benefited by low prices and balancing the benefits to buyers from low prices with the benefits to sellers of high prices is the only ethical pricing issue.
C)Monopolistic pricing limits the variety of products available to consumers.
D)The more uniformity of prices one finds within an industry, the less likely it is that competition exists.

Question 10

Select the statement that is at odds with the idea that pricing strategies may be unfair.

A)Large stores in competition with smaller stores can absorb losses from undercutting the smaller stores on price, an option not available to the smaller ones.
B)Established distribution systems reward large retailers with lower costs per unit rather than the smaller stores that have higher cost per unit.
C)A competitive market should drive out uncompetitive firms by driving prices down.
D)Government subsidies of one industry may keep alternative industries from competing on price.

Question 11

Identify a true statement about the obesity epidemic in the United States.

A)It is near impossible to trace particular cases of obesity-related health harm to a particular food or drink.
B)Businesses cannot claim that consumer decisions regarding use and misuse of their products play a deciding factor in obesity.
C)The harmful effects of the obesity epidemic are limited to specific individuals who became overweight as a result of poor dietary choices.
D)Cases of obesity are similar to standard cases of strict product liability.

Question 12

Which of the following statements is true of the pharmaceutical industry?

A)Critics point out that pharmaceutical companies who design, market, and manufacture drugs cannot be blamed for the great increase in opioid abuse.
B)Medical professionals who write opioid prescriptions do not have a responsibility to function as gatekeepers to limit drug use.
C)Evidence shows that the pharmaceutical industry spends more money marketing their drugs than they do on research and development of new drugs.
D)During the 1990s, the pharmaceutical industry admitted that the oxycodone and hydrocodone drugs were addictive forms of pain relief medication.

Question 13

Identify a true statement about ethics in marketing.

A)An aspect of consumer autonomy requires that customer consent be not only voluntary, but also informed.
B)It is easy to determine if potential consumers are being treated with respect in marketing situations.
C)The existence of buyers for a product and sellers willing to sell that product implies that such transactions are ethically legitimate.
D)Evidence shows that effective marketing causes greater consumption, leading to a happy condition termed "affluenza."

Question 14

The legal concept of negligence focuses on the conduct and state of mind of the producers and holds them responsible for harms only when they fail to act in ways that could have prevented the harm.

Question 15

Even though parties freely engage in an exchange of goods or services, we cannot be sure that autonomy has been respected (the Kantian requirement) and that mutual benefit has been achieved (the utilitarian requirement).

Question 16

Need for a product, or anxiety and other stress experienced during a business transaction, or price gouging may make a consumer's choice less voluntary, and misleading advertising or incomplete understanding of a product's complexity may make his or her consent less informed.

Question 17

Given that business transactions between two parties are mutually beneficial and freely entered into, social norms of equal treatment and fairness or questions as to what social goods are promoted or threatened are not ethically relevant to the transactions.

Question 18

The contract model of the marketing relationship that offers a consumer only a limited or expressed warranty on a product is not really one-sided nor does it fail to meet the standards of truly informed consent because the consumer agrees to these limitations.

Question 19

In claiming that the concept of negligence should include the standard of the "reasonable" person who is a thoughtful, reflective, and judicious decision maker, we are surely asking no more of the average consumer than he or she is capable of giving.

Question 20

The legal doctrine of strict product liability is controversial because it unfairly holds a business accountable for paying damages in cases where it was not at fault.

Question 21

According to McCall's fairness argument, holding the manufacturer liable under the strict product liability doctrine is fair because the injuries caused by a product are externalities that fairness requires to be internalized in the exchange between producer and consumer.

Question 22

Because the efficiency benefits of large retailers can be passed on to consumers in the form of lower prices and because a competitive market should drive out uncompetitive firms, there is no persuasive rationale for claiming that it is unethical and unfair to force smaller stores out of businesses by temporarily pricing products under cost.

Question 23

Even if there are social costs involved in a transaction, costs not reflected in the price agreed to by the parties to the transaction, the fact that the price is freely agreed to means that it must still be accepted as fair and beneficial.

Question 24

The assumption that consumers are benefited whenever their preferences are satisfied in the market holds true under close scrutiny.

Question 25

A prima facie ethically legitimate market exchange is conditional to mutual benefit for each party involved.

Question 26

The ethical perspective that underlies tort law holds that we all owe other people certain general duties, even if we have not explicitly and voluntarily assumed them.