Deck 14: Consumer Protection

Question 1

The Latin phrase,caveat emptor,meaning "let the seller beware" has put sellers on alert to look after their own interests.

Answer 1

False

Question 2

The Children's Online Privacy Protection Act limits the collection of information online from and about children under the age of 13.

Answer 2

True

Question 3

Consumer advocacy groups in the United States actively promote and speak for the interests of millions of consumers.

Answer 3

True

Question 4

Consumers make less rational choices when they have accurate information about a product.

Question 5

Deceptive advertising is still legal in most countries.

Question 6

Industry "self-regulation" includes carrying out government mandated recalls.

Question 7

Which of the following is (are)core rights of consumers?

A) The right to safety.
B) The right to be represented.
C) The right to purchase.
D) All of the above.

Question 8

In the "consumer self-help" approach to protecting consumer privacy rights,new government regulations will protect the consumer online.

Question 9

The consumer's "right to privacy" assures that information disclosed in the course of a commercial transaction is not shared with others unless authorized.

Question 10

Consumers have become more dependent on businesses for product quality because:

A) The complexity of products makes choices complicated for consumers.
B) Instructions for use or care of product are provided in clear and simple language.
C) Their technical competence allows them to inspect the products thoroughly.
D) Competition has forced manufacturers to market lower-quality goods.

Question 11

The mission of the Consumer Financial Protection Bureau is to ensure that financial products and services are fair,transparent,and competitive.

Question 12

One problem with companies issuing product recalls is that the public is often unaware of them.

Question 13

A prime social responsibility of business is to safeguard consumers:

A) While continuing to supply them with goods and services they want.
B) While maintaining high profit margins.
C) By supplying consumers with products at the lowest possible cost.
D) By providing new technology.

Question 14

The "right to be heard" assures that consumers' interests will:

A) Receive full and sympathetic consideration.
B) Be protected against fraudulent or misleading information.
C) Be assured satisfactory quality and service at a fair price.
D) Be given all the facts to make an informed choice.

Question 15

Which organization brings together 250 nonprofit groups to espouse the consumer viewpoint?

A) Consumers Union.
B) Consumer Federation of America.
C) National Consumer League.
D) Public Citizen.

Question 16

The Department of Agriculture has authority over vitamins and some chemicals that may affect consumers.

Question 17

Under the "right to be heard" protection,the consumer is to be assured satisfactory quality and service at fair prices.

Question 18

One reason for business efforts to reform product liability laws is the increasing cost of insuring against liability suits.

Question 19

The doctrine of strict liability extends only to the retailer who is involved in selling the product,not the manufacturer.

Question 20

Quality management emphasizes high quality and customer satisfaction through continuous improvement of a company's product or service at the final stages of the production process.

Question 21

The act that requires lenders to inform borrowers of the annual rate of interest to be charged,plus related fees and services charges is called:

A) The Consumer Protection Act.
B) The Product Safety Act.
C) The Predatory Mortgage Act.
D) The Truth in Lending Act.

Question 22

The primary goal(s)of the Food and Drug Administration include:

A) Ensuring the safety and effectiveness of a wide range of consumer products.
B)
B) Prohibiting unfair or deceptive advertising.
C) Reviewing and approving new products before they are released to consumers.
D) Both A and C, but not

Question 23

The law requiring that toys and infant products be tested before sale is called the:

A) Child Safety Act.
B) Strong Product Safety Bill.
C) Consumer Product Safety Improvement Act.
D) Uniform Safety Testing Bill.

Question 24

An identifying marker placed on a user's computer hard drive during visits in order to identify the user during each subsequent visit and to build profiles of their behavior over time is called a:

A) Web beacon.
B) Deep packet.
C) Cookie.
D) Firewall.

Question 25

Before deregulation,government agencies frequently:

A) Held prices artificially high, shielding businesses from competition.
B) Held prices artificially low, shielding consumers from selection.
C) Encouraged overseas trade, shielding businesses from competition.
D) Discouraged overseas trade, shielding consumers from selection.

Question 26

Which of these is not a current consumer law that protects individual privacy?

A) Internet "do not track" rules.
B) The FTC's "do not call" list to avoid unwanted telemarketing calls.
C) Unwanted calls to a person's mobile phone.
D) Children's Online Privacy Protection Action of 2000.

Question 27

Online shoppers always run the risk that:

A) They might have to pay state and local taxes on goods purchased.
B) Their favorite Web sites provide a large variety of products and services.
C) The government might become overly involved in protecting consumer privacy.
D) Information they reveal in the course of a sales transaction might be misused.

Question 28

When businesses adopt voluntary policies for protecting the privacy of individuals' information disclosed during electronic transactions,this is an example of:

A) Industry self-regulation.
B) Privacy legislation.
C) Consumer self-help.
D) Business privacy regulation.

Question 29

Which of the following statements is not true about the organization Consumer Reports?

A) It is involved in activities promoting the interests of consumers.
B) It conducts extensive tests on selected consumer products and services.
C) It is supported by the federal government.
D) It publishes the results of tests online, with ratings on a brand-name basis.

Question 30

Warning consumers about the possible side effects of pharmaceutical drugs is an example of consumer protection against:

A) Predatory pricing.
B) Incomplete information disclosure.
C) Hazardous products.
D) Violations of individual privacy.

Question 31

In the United States,which of the following agencies enforces the laws prohibiting deceptive advertising?

A) Congress.
B) Consumer Product Safety Commission.
C) Federal Trade Commission.
D) Department of Justice.

Question 32

Consumers owe more money on their home loans (mortgages)than on any other kind of household debt.After mortgages,what makes up the largest portion of household debt?

A) Credit card debt.
B) Medical debt.
C) Car loans.
D) Student loans.

Question 33

Which of the following is not a goal of consumer protection laws?

A) Encourage competitive pricing.
B) Facilitate consumers' getting extended credit when making purchases.
C) Provide consumers with better information when making purchases.
D) Protect consumers against possible hazards from products purchased.

Question 34

Which part of the Department of Justice protects the public from being charged excess fees based on one's race?

A) Consumer Product Safety Commission.
B) Civil Rights Division.
C) Consumer Financial Protection Bureau.
D) Federal Trade Commission.

Question 35

The main responsibility of the National Highway Traffic Safety Administration is to:

A) Set a uniform national speed limit.
B) Set airline safety standards.
C) Set motor vehicle safety standards.
D) Safeguard consumers from altered odometers.

Question 36

The major federal consumer protection agencies are authorized by law to:

A) Intervene directly into the very center of free market activities, if that is considered necessary to protect consumers.
B) Substitute government-mandated standards for decision making by private buyers and sellers.
C)
C) Substitute private manufacturing standards for government-mandated standards.
D) Both A and B, but not

Question 37

Groups that collect and combine data from various sources into individual profiles that are sold to retailers and advertisers are called:

A) Flash cookies.
B) Data aggregators.
C) Internet marketers.
D) 360-degree viewers.

Question 38

Which of the following describe why the consumer movement exists?
A)

A) Services have become less specialized.
B) Some product advertising claims have been inflated.
C) Some businesses have violated the public's privacy.
D) Both B and C, but not

Question 39

Under what legal doctrine does a firm bear legal responsibility for injuries caused by something it made or sold,whether or not it was negligent or breached a warranty?

A) Strict liability.
B) Product liability.
C) Consumer liability.
D) Supplier liability.

Question 40

Advertising that is targeted to particular customers,based on their observed online behavior,is called:

A) Targeted advertising.
B) Tracking advertising.
C) Behavioral advertising.
D) Online advertising.

Question 41

In some cases,businesses have banded together to agree on how they will treat their customers.This is called:

A) Code of regulation.
B) Consumer affairs doctrine.
C) Voluntary industry codes of conduct.
D) Industry action standards.

Question 42

Consumer advocates argue that consumers are entitled to five core rights.What are they? Explain each.

Question 43

How do new technologies increasingly enable businesses to collect and use vast amounts of personal data about their customers and potential customers? Explain.Do you think these trends benefit consumers or not,and why?

Question 44

One alternative to product liability lawsuits is called:

A) Limited resolution.
B) Punitive damages reform.
C) Alternative dispute resolution.
D) Consumerism.

Question 45

The consumer movement exists because consumers want to be treated fairly and honestly in the marketplace.Outline and explain the additional reasons for the existence of the consumer movement.

Question 46

Which of these statements is true regarding the Class Action Fairness Act of 2005?

A) Lawyers were restricted from shopping for friendly venues to try interstate cases.
B) Excessive attorney compensation was limited.
C)
C) The burden of proof was shifted to government.
D) Both A and B, but not

Question 47

In your opinion,do U.S.product liability laws need to be changed? If so,how? If not,why not? Investigate proposed changes in product liability laws over the last several years and evaluate them.

Question 48

Many companies have argued that the evolution of strict liability has:

A) Unfairly burdened them with excess costs.
B) Decreased liability insurance rates.
C) Increased corporate revenues and dividends.
D) Changed top management's attitude about the consumer.

Question 49

Consumer groups have generally opposed the idea of product liability reform using which of the following arguments?

A) Punitive damages should be limited.
B) Strict liability should be retained.
C) The burden of proof should be shifted to consumers.
D) Losers should be made to pay some of the other side's legal bills.

Question 50

Businesses can take a number of measures to respond voluntarily to consumer demands.Which of the following is an example of such a measure?

A) Product liability law reform.
B) Customer call centers.
C) Consumer advocacy groups.
D) Alternative dispute resolution policies.

Question 51

Because of the movement towards quality management,companies are now focusing on the customer.How does this occur? How could a specific industry be even more socially responsible to its customers? Explain.

Question 52

Outline some of the major government agencies responsible for consumer related issues.What is the major mission of each?