Deck 24: Economic, Social, and Legal Effects of Advertising

Question 1

Among the following, which is NOT an economic argument that favors advertising?

A)supports largely unrestricted media that disseminate entertainment as well as news
B)contributes to increases in the overall economy by increasing brand and generic consumption
C)persuades rather than informs, providing only positive information
D)allows companies to achieve economies of scale in production, helping to lower prices of products
E)provides consumers information that helps them make better decisions about new products, their availability, their prices and their benefits

Answer 1

C

Question 2

In the past decade, researchers have studied the cultural effects of advertising from the perspective of:

A)its promotion of desirable economic standards.
B)its inadvertent social role.
C)its promotion of a desirable corporate social responsibility agenda.
D)its ability to creates new catchphrases.
E)its ability to separate itself from the unreal societal benefits.

Answer 2

B

Question 3

Which audience segment has lost ground in the struggle for advertising realism?

A)the elderly
B)women
C)men
D)minorities
E)educators

Answer 3

C

Question 4

Which of the following topics covered by the Ad Council has NOT drawn criticism?

A)environmental issues
B)the role of capitalism and society
C)preventing forest fires
D)the role of the family
E)the V-chip blocking capabilities in television

Question 5

Which of the following is NOT an indictment that advertising abuses its power of influence?

A)makes people buy things they don't need
B)It takes up social causes.
C)makes people buy things they don't want
D)lowers people's morals
E)exploits the most susceptible segments of society

Question 6

Critics say objectionable content today includes all of the following EXCEPT:

A)creation of stereotypes.
B)exaggerated product claims.
C)strides in treatment of the elderly, women, and ethnic groups.
D)manipulating children with unrealistic promises.
E)use of sexual themes.

Question 7

What causes government regulators and courts as well as concerned consumers to scrutinize advertising?

A)its effectiveness as a communication vehicle
B)its efficiency in delivering what its promises
C)its pervasiveness in society and its responsibility to adhere to high ethical and honest business standards
D)its ability to manipulate consumers

Question 8

Advertising helps consumers make more informed decisions about all of the following EXCEPT:

A)product liabilities.
B)new products.
C)availability of products.
D)product benefits.
E)price of the product.

Question 9

Specific examples of social criticism of advertising have NOT included:

A)privacy concerns.
B)advertising's role in obesity.
C)product placement.
D)intrusive technology like spam, unsolicited e-mail, and tracking devices.
E)legitimate claims made through the messages.

Question 10

In recent years, the range of social criticism of advertising has involved all of the following EXCEPT:

A)advertising strategies.
B)advertising's execution.
C)researchers analyzing it.
D)audiences targeted by advertising.
E)groups using advertising.

Question 11

Among the following, which is NOT an economic argument against advertising?

A)provides consumers information that helps them make better decisions about new products, their availability, their prices and their benefits
B)persuades rather than informs, providing only positive information
C)From a macroeconomic aspect, advertising spending is wasteful.
D)does not actually lower prices of products
E)High rates of advertising expenditures block the entry of new products.

Question 12

Which of the following is a tactical category of cause-related marketing?

A)licensing programs
B)relationship programs
C)media promotions
D)franchise opportunities
E)exploitative efforts

Question 13

For advertising, the era of public awareness encompassed the following years.

A)1890-1955
B)1955 to present
C)1900-1965
D)1835-1899
E)1968-1972

Question 14

Which of the following is NOT a way in which relationships between advertisers and the media are changing?

A)Advertisers may withhold advertising dollars in an attempt to control editorial decisions and gain favorable coverage.
B)Advertisers are financing production and developing content for programming.
C)The use of advertorials that look like editorial content written by advertising copywriters and PR specialists is increasing.
D)Advertisers sink in more dollars to control editorial decisions.
E)Product placement is becoming more prevalent in movies, television shoes, the editorial content of print media, and in video games.

Question 15

Truth alone is not adequate to meet the demands of ethical advertising represents the:

A)era of public awareness.
B)era of social responsibility.
C)era of economic responsibility.
D)era of laissez-faire.
E)era of the square deal.

Question 16

During this era, most people accepted advertising as "buyer beware" communication when any claim for a product was allowed.

A)the era of corporate responsibility
B)the era of social responsibility
C)the era of public awareness
D)the era of exaggerated claims
E)the era of economic responsibility

Question 17

Which concept would NOT likely be why a company would engage in cause-related marketing?

A)It wants a high-impact project were it can really make a difference.
B)Cause can be promoted and developed for a brief period of time to benefit the advertiser's current product promotion.
C)Consumers welcome the opportunity to support a worthy cause with their purchases and reward companies for their effort.
D)Consumers may switch brands to show their support of the cause associated with a company or brand.
E)It can create goodwill with the customer and build the company's brand.

Question 18

Which of the following-so far-is NOT a product category that stirs criticism?

A)fast-food products
B)pain relievers
C)condoms
D)cigarettes
E)distilled spirits

Question 19

Efforts are being made by advertisers to portray all of the following groups more accurately EXCEPT for:

A)the elderly.
B)men.
C)women.
D)minorities.
E)educators.

Question 20

All of the following pertain to the Advertising Council EXCEPT:

A)completely avoids controversial issues.
B)major agencies produce advertising pro bono.
C)their ads work, if the issue of seat belt usage is any indication.
D)has competition for donated media from private organizations delivering social messages.
E)the media donates time and space to run ads.

Question 21

The Federal Trade Act did all of the following EXCEPT:

A)was followed by the Federal Trade Commission Act that made unfair methods of competition illegal.
B)was passed as a reaction to public and congressional concerns over large companies driving out small competitors.
C)ignored legal restraint of trade practices.
D)affected the oil, railroad, steel and shipping industries.
E)was passed in 1914.

Question 22

Which of the following is NOT done by the FTC?

A)issues formal FTC industry rules
B)concentrates on each and every complaint made by even the smallest group of consumers
C)enforces federal laws passed by Congress
D)educates businesses and consumers about their rights
E)offers advice to businesses concerning implementation of FTC regulations and other regulations that affect them

Question 23

Which of the following is NOT a responsibility of the Food and Drug Administration that resulted from passage of the Federal Food, Drug, and Cosmetic Act?

A)control over cosmetics and therapeutic devices
B)no longer required to prove intent to defraud in drug mislabeling cases
C)authorized factory inspections
D)required drugs already in the market be proven to be safe before further marketing
E)provided that safe tolerances be set for unavoidable poisonous substances

Question 24

A carry-over effect from deceptive advertising that creates a lack of public trust is that it makes it even more difficult:

A)to deliver a message on point.
B)to honestly and effectively promote services and products.
C)to make extravagant claims on future products.
D)to pinpoint target audiences.
E)to pinpoint selling points.

Question 25

Which of the following broadened the scope of the FTC to include protection of consumers as well as businesses from false advertising?

A)FTC v. Winsted Hosiery Company
B)Robinson-Patman Act
C)Wheeler-Lea Amendments
D)National Federation of Advertising Act
E)Central Hudson Gas & Electric v. Public Service Commission of New York

Question 26

Which of the following is NOT true of the signing of a FTC consent decree?

A)A hearing will be held by an administrative judge.
B)By signing it, a firm agrees to end the deceptive advertising practice.
C)After signing it, if the advertiser continues running the deceptive advertising, it can be fined $10,000 per day.
D)Most complaints are settled in this way.
E)If the advertiser refuses to sign, the FTC will issue a cease and desist order.

Question 27

The FTC requires that a warrantee be available to be read by a consumer prior to purchase when the item costs more than:

A)$10.
B)$15.
C)$20.
D)$25.
E)$35.

Question 28

To convict a party involved for mail fraud, the postal inspectors must prove:

A)the product, service, or investment opportunity is from an American-based organization.
B)the party used the U.S. mail to carry out the fraud.
C)the party used e-mail and gave a P.O. box number in the solicitation.
D)the offer was unintentionally misrepresented.
E)the offer was aimed at lawyers.

Question 29

Which of the following would NOT be true of testimonials?

A)The heart of this technique depends on having a sports star, entertainment personality, or acknowledged expert endorse a brand.
B)People like to identify with role models.
C)Personalities who knowingly engage in deception are not liable, only the advertiser is.
D)People like to identify with celebrities and role models.
E)The personality must have actually used the product or service at the time of the testimonial.

Question 30

Which of the following does NOT pertain to the Robinson-Patman Act?

A)evolved from Clayton Antitrust Act
B)prevents manufacturers from providing a promotional allowance to one retailer unless it is also offered it to competitors on an equally proportionate basis
C)Original intent was to protect retailers from manufacturers.
D)Manufacturers are protected from retailers actions.
E)affected the distribution and use of co-op advertising dollars

Question 31

In a typical model for FTC intervention in an alleged deception, the second step is:

A)be sure there is a formal claim.
B)a request by the FTC for substantiation from the advertiser.
C)issuing a cease and desist order.
D)requesting the advertiser sign a consent decree.
E)mediation and litigation.

Question 32

The term that describes highly exaggerated opinions such as superlatives like the best or superior that are used in advertisements are called:

A)misrepresentation.
B)misdescription.
C)substantiation.
D)puffery.
E)fluff.

Question 33

At the heart of FTC enforcement is the idea that advertisers must be able to ________ their claims.

A)deny
B)substantiate
C)counter
D)renounce
E)reenforce

Question 34

Which of the following is NOT true about the principle of caveat emptor?

A)literally means "let the buyer beware"
B)literally means "let the seller beware"
C)assumes perfect knowledge on the part of participants in the marketplace
D)assumes seller and buyer have equal information
E)It assumes that buyers and sellers will act rationally, making correct economic choices without government interference.

Question 35

One of the three-part tests the FTC uses to determine if an advertisement is untruthful or deceptive.

A)The act or practice must be considered from the perspective of a consumer who is acting reasonably.
B)The act or practice must be considered from the perspective of the advertiser who is acting responsibly.
C)The act or practice must be considered to be mutually beneficial to the consumer and advertiser regardless of its reasonability.
D)The representation, omission, or practice must be immaterial.
E)The commission or practice as well as the representation is more than immaterial.

Question 36

The Robinson-Patman Act evolved from which of the following?

A)Federal Sherman Antitrust Act
B)Wheeler-Lea Amendment
C)Clayton Trust Act
D)Federal Trade Act
E)Slotting Fees Act

Question 37

The Deceptive Mail Prevention and Enforcement Act (DMPEA)essentially gave the USPS:

A)the right to convict anyone perpetrating fraud via mail.
B)the right to obtain a mail stop order against a company sending false advertising.
C)the right to impose civil penalties of up to $1 million for the first offense depending on mail volume involved.
D)the right to inspect mail advertising and promotion schemes involving susceptible groups, especially the elderly.
E)the right to create class action suits and represent those who were defrauded.

Question 38

When advertisers use the term free in an ad, the FTC holds them to which of the following standards?

A)A merchant has the right to recoup any cost associated with the offer through forcing the purchase of another item.
B)Any disclosure about the offer price must be conspicuously made in close conjunction with the offer.
C)Printing the details in a fine print footnote satisfies disclosure.
D)Two-for-one offers are exempt from these rules as they are not offering anything for free, only half-price.
E)A "two fer" deal means the first item can be sold at the highest price offered in the past 30 days.

Question 39

Which of the following cases could be judged as a victory for commercial speech?

A)Board of Trustees of the State University of New York v. Fox
B)Posadas de Puerto Rico Associates v. Tourism Company of Puerto Rico
C)City of Cincinnati v. Discovery Network
D)Friedman v. Rogers
E)44 Liquormart v. Rhode Island

Question 40

Which of the following is part of the Central Hudson Four-Part Test?

A)If there is deceptive material, is there consumer loss?
B)Is the expression covered under the First Amendment?
C)Is the government's interest less than substantial?
D)Is the claim verifiable?
E)Does the regulation imposed advance the cause of consumers?

Question 41

Which of the following is NOT a reason some media will reject advertising?

A)nature of the product

Question 42

Characteristics of the right to privacy include all of the following EXCEPT:

A)in advertising, the images of deceased celebrities can be used with permission of their estates.
B)private individuals are protected from having their likenesses used in an advertisement without their permission.
C)public figures have far more protection than the general public.
D)use of a name or picture of a person in an advertisement without prior consent is a misdemeanor.
E)some states have ruled that the use of impersonators in commercials without permission is also illegal.

Question 43

The landmark case that allows lawyers to advertise was:

A)Edenfeld v. Fane.
B)Bates v. State Bar of Arizona.
C)Friedman v. Rogers.
D)First National Bank of Boston v. Bellotti.
E)Dewey v. Chetham & Howe.

Question 44

Advocates of advertising maintain it provides consumers with information about new products, availability of products and services, price, and product benefits, so they can make informed decisions.

Question 45

The Shapero case established that:

A)there are distinctions among various types of professional solicitations.
B)a targeted mail solicitation by accountants to prospective clients is allowable.
C)prospective clients would not likely be subject to uninformed acquiescence.
D)a targeted letter posed no threat of pressure to consumers who are under a threat of legal action.
E)a letter to consumers involved in a legal action is a threat to their privacy.

Question 46

The Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM)Act of 2003 does all of the following EXCEPT:

A)establishes requirements for those who send commercial e-mail.
B)spells out penalties for spammers.
C)provides uniform enforcement from state to state.
D)spells out penalties for companies whose products are advertised in spam.
E)gives consumers the right to ask e-mailers to stop spamming them.

Question 47

A new school of research on advertising suggests that advertising's cultural dimension is separate from its economic dimensions; consumption must be understood outside the societal and group implications in which it is undertaken.

Question 48

Which of the following does NOT pertain to the Nike v. Kasky case?

A)Nike attempted to set the record straight on working conditions in its overseas plants by sending news media information offering its side of the story.
B)The California Supreme Court ruled the comments constituted advertising and Nike should establish truthfulness of its claims under the State Unfair Practices Act.
C)The legal position of corporate speech and related advertising was left in limbo because the case was settled out of court.
D)The California Supreme Court and the U.S. Supreme Court sent mixed signals for First Amendment protection of commercial speech.
E)Nike attempted to market a faulty designed shoes that was detrimental to the natural growth of a child's foot.

Question 49

From a macroeconomics perspective, critics say advertising spending is largely wasted because it causes brand switching without any net economic gain to society.

Question 50

As a public element of business, advertising is in the limelight more than any other aspect of the marketing mix.

Question 51

The 1998 Master Settlement Agreement focused on:

A)health insurance firms and their rights to solicit.
B)pharmaceutical companies and their rights to advertise on TV.
C)tobacco companies and how they could advertise and promote their products.
D)stockbrokers and their rights and responsibilities to their clients.
E)lawyers and their ability to advertise.

Question 52

What does it appear the U.S. Supreme Court is saying about commercial aspects to speech?

A)The government must meet a higher standard of public interest before agreeing to any prohibition of commercial speech.
B)The commercial aspect of speech is removed from rights granted by the First Amendment.
C)Economic topics are not covered in the First Amendment.
D)There are no gray areas when it comes to corporate advertising.
E)Corporate advertising deserves no protection regardless of circumstances.

Question 53

Advertising encourages brand switching among established products rather than allowing consumers to make informed decisions about new products entering the marketplace.

Question 54

Critics of advertising say that, because advertising emphasizes emotional appeals, so price becomes less important in a consumer purchase decision, thus insulating a brand from price competition.

Question 55

Consumers are becoming more concerned about invasion of privacy due to the emergence of new, sophisticated communication technology and databases that deliver unwanted and intrusive advertising messages or track consumer behavior.

Question 56

In product categories where there are several dominant firms, the rate of advertising expenditures is so high that other companies find it difficult to introduce a new product into the category.

Question 57

Which of the following is NOT a basic guideline for toy commercials?

A)Toys must be presented literally and realistically.
B)If the toy represents a drowning hazard, it must be revealed.
C)Animation is limited to about 10 seconds in a TV spot.
D)Copy must clearly disclose whether parts are sold separately.
E)Copy must clearly disclose whether batteries are included.

Question 58

Proponents of advertising say that, by promoting the differentiation of products, it encourages continuing product improvements as well as the introduction of new and innovative goods and services.

Question 59

All of the following apply to comparison advertising EXCEPT:

A)companies may be sued by competitors for commercials that unfairly disparage that competitor's brand.
B)require substantiation of qualities for only your own brand.
C)the first comparison advertising used was in the 1930s by Chrysler, inviting customers to "try all three."
D)comparative advertising perceived as unfair by consumers may damage advertising in general.
E)it may inadvertently promote the competitors' brands.

Question 60

The economic and social components of advertising are mutually exclusive.

Question 61

One unintended message communicated in advertising is related to the portrayal of various segments of society.

Question 62

In 1983, when American Express promised to make a donation to the renovation of the Statue of Liberty each time someone used their American Express card, it ushered in the concept of social marketing, or what others call ________ marketing.

Question 63

If the FTC challenges an advertising claim, which the advertiser cannot substantiate, that advertiser is forced to publicly admit wrongdoing and to stop using the advertisement.

Question 64

Advertisers depend on the public's trust of its honesty and fairness for their long-term success.

Question 65

Proponents of advertising counter the argument that advertising unduly influences people by reminding us that virtually every theory of communication indicates consumers will not take some action solely because of advertising.

Question 66

As a result of a more open environment for commercial messages, judicial opinions give full First Amendment protection to advertising.

Question 67

The use of inappropriate humor, messages in poor taste

Question 68

Supreme Court decisions have been fairly broad and wide-ranging, leading toward a definitive definition of the rights of commercial speech.

Question 69

NARB has 70 members, half of whom are in the advertising field and half are from the public sector.

Question 70

During the era of public awareness public and government regulators began to reject the notion of ________, or anything goes, in the then-unregulated U.S. economic system.

Question 71

Two cases that may in the future provide a significant step in affording more complete constitutional protection to commercial speech involve cases in Rhode Island and Baltimore regarding alcoholic beverage advertising.

Question 72

The primary investigative bureau of the National Advertising Review Council (NARC)is administered by the Council of Better Business Bureau, Inc. and is called CARU.

Question 73

The City of Cincinnati v. Discovery Network case has been widely viewed as a victory for proponents of First Amendment protection for commercial speech.

Question 74

A common attempt to control editorial independence is the threat of, or actual withholding of, advertising dollars from that newspaper, magazine, or television program unless the medium makes editorial decisions that are favorable for the company advertising.

Question 75

Prior to settlement of the Bates v. State of Arizona case, there was an absolute prohibition on advertising by attorneys.

Question 76

The FTC focuses its efforts on the regulation of general advertising and marketing practices rather than concentrating a single industry.

Question 77

If an advertiser refuses to sign a consent decree, the FTC can issue a cease and desist order.

Question 78

CARU in cooperation with NARC primarily focuses its attention on issues of advertising to children, including Web site privacy.

Question 79

Advertisers know that providing false and misleading advertising is not in their best interest because unsatisfied or dissatisfied customers rarely return.

Question 80

The purpose of the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 was to regulate the sending of unwanted and unsolicited Internet messages, known as ________.