Deck 33: Consumer and Environmental Law

Question 1

A credit-reporting agency may issue a credit report to anyone who asks.

Answer 1

False

Question 2

A collection agency cannot contact a debtor at the debtor's place of employment if the employer objects.

Answer 2

False

Question 3

A consumer may not be denied credit on the basis of a credit report.

Answer 3

False

Question 4

Counteradvertising is advertising that counters a competitor's claims.

Question 5

A polluter is liable for an injury due to an ultrahazardous activity only if the polluter failed to exercise reasonable care.

Question 6

A person who receives unsolicited merchandise and keeps it without notifying the sender commits mail fraud.

Question 7

An injured party's common-law suit against a polluter may be dismissed for lack of standing.

Question 8

A loan between two consumers is subject to the Truth-in-Lending Act.

Question 9

Federal law prohibits vague generalities and obvious exaggerations in advertising.

Question 10

An individual is not liable for any amount of unauthorized charges on his or her credit card.

Question 11

The test for whether an ad is deceptive is whether a reason?able con?sumer would be misled.

Question 12

The common law doctrine of nuisance prevents individuals from filing "nuisance" suits against polluters.

Question 13

"Regulation Z" is a generic term for any consumer protection law.

Question 14

A consumer who believes that he or she has been or may be victimized by identity theft may place an alert on his or her credit file.

Question 15

Drugs must be shown to be effective and safe before they can be marketed.

Question 16

It is generally illegal to send an ad via fax without the recipi?ent's permission.

Question 17

An advertisement that contains an endorsement by a celebrity may be deemed deceptive if the celebrity does not actually use the product.

Question 18

On request,a consumer may obtain the source of any information being given out by a credit agency.

Question 19

In a transaction subject to the Truth-in-Lending Act,all of the terms of a credit instrument must be clearly and conspicuously disclosed.

Question 20

The Fair Debt Collection Practices Act applies to anyone who tries to col?lect a debt.

Question 21

City,county,and local governments oversee certain aspects of the environment.

Question 22

A private citizen can enforce a federal environmental law if he or she has standing.

Question 23

Corporate officers may be subject to criminal penalties for violations of the Clean Air Act.

Question 24

A new source of water pollutants does not need to install pollution-control equip?ment until pollution is proved.

Question 25

A toxic tort is an action against a polluter that results in heavy,or "toxic," damages.

Question 26

Once the government begins to clean up a waste dis?posal site,only the party who generated the waste must contribute to the cost.

Question 27

Federal statutes provide the basis for issuing regulations to control air pollution emanating from mobile sources only.

Question 28

The primary responsibility for implementing air-quality standards for stationary sources rests with state and local governments.

Question 29

Any oil facility that discharges oil into navigable waters is liable for the clean-up costs plus damages.

Question 30

Federal statutes provide the basis for issuing regulations to control wa?ter pollution.

Question 31

All agencies of the federal government must take environmental factors into account when making significant decisions.

Question 32

To generate sales,Yakkity-Yak,Inc.,uses phone solicitation.Under federal law and Federal Trade Commission regulations,in soliciting business,Yakkity-Yak's telemarketers must

A) disclose all material facts related to a sale.
B) identify the seller's name (only if asked).
C) refrain from calling consumers who have not requested a call.
D) speak clearly and conspicuously.

Question 33

Frosty's Appliance Store advertises freezers at a "Special Low Price of $299." When Garth tries to buy one of the freezers,Huey,the salesperson,tells him that they are all sold and no more are obtainable.Huey adds that Frosty's has other freezers for $2,299.This is

A) a legitimate sales technique.
B) bait-and-switch advertising.
C) counteradvertising.
D) puffery.

Question 34

Orange Company makes computers.The company's ad states that "if you aren't eatin' an Orange,you aren't gettin' any 'C." The Federal Trade Com?mission would consider this ad

A) false and misleading.
B) false only.
C) misleading only.
D) neither false nor misleading.

Question 35

GR8 Fashion,Inc.,complains to the Federal Trade Commission (FTC)about an ad broadcast by Hotte Clothes Company,GR8's competitor.The FTC investigates and concludes that the ad is deceptive.The FTC's next step is to

A) conduct negotiations between the competitors.
B) draft a formal complaint.
C) issue a cease-and-desist order.
D) permit GR8 to broadcast similarly deceptive counteradvertising.

Question 36

Pollution-control standards generally do not change.

Question 37

Miracle Products,Inc.,engages in de?ceptive advertising when it markets its product Weight-Off as able to help consumers lose weight in their sleep.Miracle is ordered to include in all future adver?tising of Weight-Off the statement,"Weight-Off will not cause anyone to lose weight in their sleep." This is

A) a counteradvertising order.
B) a multiple product order.
C) bait-and-switch advertising.
D) excessive abuse of authority.

Question 38

The Environmental Protection Agency may ban the use of a toxic substance altogether.

Question 39

Those who violate the Clean Water Act may be subject to civil penalties.

Question 40

Different standards for air quality apply to sources of pollution in clean areas and sources in polluted areas.

Question 41

Midwest Power Corporation wants to build a nuclear power plant on pri?vate land,for which a federal permit is required.For this action,an en?viron?mental impact statement is

A) prohibited.
B) required.
C) unnecessary.
D) voluntary.

Question 42

Wheels & Deals Corporation is subject to the Truth-in-Lending Act,which concerns

A) the credit-worthiness of certain financial institutions and lenders.
B) the disclosure of credit terms in certain transactions.
C) the limits on certain types of credit that a creditor may grant.
D) the limits on certain types of debt that a consumer can accrue.

Question 43

In the ordinary course of business,Xtra Charge Company sells goods to Yvon and other consumers on credit under installment sales contracts that typically require at least one year of monthly payments.Xtra does not disclose all of the credit terms to its customers.This practice is most likely to result in

A) a cease-and-desist order.
B) a fine.
C) no sanctions.
D) rescission of the contracts.

Question 44

The Environmental Protection Agency (EPA)has the authority to regulate "any air pollutant." Fresher Air Group,a private organization that supports cleaner air,can file a suit against the EPA to

A) compel the EPA to act only.
B) compel the EPA to act or prevent it from acting.
C) neither compel the EPA to act nor prevent it from acting.
D) prevent the EPA from acting only.

Question 45

Kristen receives unsolicited merchandise in the mail.Kristen

A) may keep the merchandise without any obligation to the sender.
B) must return the merchandise within five days to avoid payment.
C) must return the merchandise within fifteen days to avoid payment.
D) must return the merchandise within thirty days to avoid payment.

Question 46

Paychex Loan Company extends credit in the ordinary course of its busi?ness.Under the Truth-in-Lending Act,Paychex must inform potential borrowers of

A) credit terms offered by other lenders and its own credit terms.
B) only credit terms offered by other lenders.
C) only its own credit terms.
D) only the credit terms that will convince borrowers to "close the deal."

Question 47

Debris Disposal Center operates a recycling plant.Edwin and other Debris neighbors file a suit,alleging injuries from the plant.To succeed,they must show that Debris failed to use reasonable care if the suit is based on

A) a negligence theory.
B) a nuisance theory.
C) any legal theory.
D) a strict liability theory.

Question 48

In the ordinary course of business,EZ Funds Corporation offers credit to Fay and other consumers and reports on the loans to credit agencies.To save time and money,EZ generally does not correct or update its reported information.This is most likely to result in

A) a levy of a nominal fine.
B) an assessment of damages.
C) an order of rescission of the loan contracts.
D) no sanctions.

Question 49

Brad borrows $20,000 from Citizens Bank to repair his home and to buy a car.Brad buys a stereo from Deep Discount Store in a transaction financed by Deep.If these parties are subject to the Truth-in-Lending Act,Regulation Z ap?plies to

A) the car loan only.
B) the home repair loan only.
C) the retail installment sale only.
D) the car loan, the home repair loan, and the retail installment sale.

Question 50

Special Roast Coffee,Inc.,processes and sells a variety of coffee products.Special Roast's product packages must include

A) neither the contents' net quantity nor the product's identity.
B) the contents' net quantity and the product's identity.
C) the contents' net quantity only.
D) the product's identity only.

Question 51

Like other manufacturers and sellers,Happy Household Products Company packages its products with labels.Under federal law,such labels must be

A) accurate and use easily understood words.
B) bright and feature eye-catching colors.
C) graphically distinctive and well-designed.
D) interesting and revealing to the average consumer.

Question 52

Fabio makes a living by farming near Gastric Combustibles,Inc.,which has discharged pollutants into the area's air and water.If Fabio brings a suit asking for an injunction against Gastric on the ground of nuisance,the court is most likely to rule in Gastric's favor if

A) Fabio's operation also pollutes, with pesticides and herbicides.
B) Fabio's operation suffers harm distinct from the general public.
C) Gastric's operation is the core of the local economy.
D) Gastric's operation uses reasonable care to avoid harm to Fabio.

Question 53

On behalf of RiteNow Collection Agency,Sid poses as a police officer in an attempt to collect payment from Tylo for a shipment of scuba equipment that she returned to Undersea Company two months earlier.This violates

A) no federal law.
B) the Fair Credit Reporting Act.
C) the Fair Debt Collection Practices Act.
D) the Truth-in-Lending Act.

Question 54

Truckers Storage Depot,a private company,wants to build a ware?house on private land. For this action,an environmental impact state?ment is

A) prohibited.
B) required.
C) unnecessary.
D) voluntary.

Question 55

Fun-E Products,Inc.,makes and sells toys.The government agency that has the authority to remove a poten?tially hazardous toy from the market is

A) the Consumer Product Safety Commission.
B) the Federal Reserve Board of Governors.
C) the Federal Trade Commission.
D) the Food and Drug Administration.

Question 56

Furniture Depot sells Gail a bedroom suite on credit.Gail fails to make the scheduled payments for six months.Furniture Depot sends her a let?ter,asking for immediate payment.This is a violation of

A) no federal law.
B) the Fair and Accurate Credit Transactions Act.
C) the Fair Debt Collection Practices Act.
D) the Truth-in-Lending Act.

Question 57

Missoula,Montana,passes an ordinance to regulate waste disposal.The disposal of waste may also be regulated by

A) all other levels of government.
B) no other levels of government.
C) the federal government only.
D) the Montana state government only.

Question 58

Longhaul Trucking Company transports radioactive materials.Marla suffers from cancer.To succeed in a strict liability action against Longhaul,Marla must show that her injury was caused by

A) Longhaul's failure to use reasonable care to prevent harm to Marla.
B) Longhaul's intentional lack of regard for the general public.
C) Longhaul's operation.
D) radiation from any source.

Question 59

Penny Stock Company faxes ads to Quality Personnel Corporation and other businesses without the recipients' permission.This is

A) illegal.
B) legal and smart because such ads are generally cheap.
C) legal but not smart because such ads are generally ineffective.
D) legal but only potentially smart, depending on the response rate.

Question 60

Prime Equity Company extends credit in the ordinary course of its busi?ness to consumers.Under the Truth-in-Lending Act,Prime must inform a prospective borrower of

A) other lenders' credit terms.
B) Prime's credit terms.
C) Prime's financial situation.
D) the borrower's credit score.

Question 61

Jack owns land located outside Metro City.Jack sells the land to Quality Disposal,Inc.,which establishes a hazardous waste disposal facility at the site.Quality Disposal accepts only waste transported by Regional Trucking Company exclusively from Consolidated Industries,Inc.Several years later,Quality Disposal closes its facility and sells the land to Price Rite Corporation,which builds a Price Rite Discount Store on the site.Meanwhile,some of Metro's citizens complain to the Environmental Protection Agency (EPA)that Metro's municipal water supply is pol?luted.The EPA investigates and discovers that the sources of the pollu?tion are leaks of hazardous waste from what is now the Price Rite prop?erty.The EPA cleans up the site.Who can be held liable for the cost of cleaning up the site? What standards must Metro meet regarding the water?

Question 62

Oil Refining Company's plant emits hazardous air pollutants.Regarding these pollutants,the plant must use

A) the all-pollution elimination technology.
B) the best possible available technology.
C) the maximum achievable control technology.
D) the practically affordable standard technology.

Question 63

Under the Marine Protection,Research,and Sanctuaries Act (the Ocean Dumping Act),Bayside Chemical Company may dump its chemical waste into the ocean

A) after obtaining a permit.
B) before obtaining a permit.
C) without a permit.
D) not at all.

Question 64

Little City Company operates a public water supply system.Little City must send to every household that it supplies with water an annual statement describing

A) Little City's financial situation and material facts that affect it.
B) other businesses in which Little City is involved and to what extent.
C) parties who might be held liable if pollution problems arise.
D) the source of the water, and any contaminants and health concerns.

Question 65

Eminent Properties,Inc.,wants to fill its wetlands to build Fieldview Homes,a residential subdivision.The Clean Water Act prohibits the filling of wetlands unless

A) any displaced wildlife is accommodated elsewhere.
B) the Army Corps of Engineers issues a permit.
C) the local community obtains a benefit.
D) the party doing the filling realizes an economic profit.

Question 66

ChemoCorp,Inc.,makes and sells pesticides.If a substance is identified as harmful and the harm is imminent,the Environmental Protection Agency,among other things,can

A) conduct an inspection of ChemoCorp's plant.
B) declare the substance to be unregulated and allow its production.
C) ignore the risk if the benefit outweighs the harm.
D) order the substance to be sold in an adulterated form.

Question 67

The Environmental Protection Agency (EPA)has the authority to regulate "any air pollutant." In issuing standards for the discharge of soot and other pollutants,the EPA

A) does not have to take economic costs into account.
B) must take into account the economic costs to businesses.
C) must take into account the economic costs to government.
D) must take into account the economic costs to the general public.

Question 68

Mouth-Waterin' Treats Company wants to sell its candy in a normal-sized package la?beled "Gigantic Size." NuFabrics,Inc.,wants to advertise its sweaters as hav?ing "That Wool Feel," but does not want to specify on labels that the sweat?ers are 100 percent polyester.Can these firms market their products as they would like? If not,why not?

Question 69

Under the Resource Conservation and Recovery Act,before hazardous waste generated by Xtreme Industries,Inc.,can be transported,the waste must be properly labeled and packaged by

A) the federal Environmental Protection Agency.
B) the local Resource Conservation and Recovery Committee.
C) the state Environmental Regulatory Commission.
D) Xtreme Industries, Inc.

Question 70

Hydraulic Equipment Company makes its products without required pollution control technology,causing a discharge of oily waste into the nearby Idle Lake.This activity can re?sult in

A) a criminal fine or imprisonment only.
B) a criminal fine, imprisonment, or an injunction only.
C) a criminal fine, imprisonment, an injunction, or damages.
D) an injunction only.

Question 71

Metro City operates its own municipal public drinking water system.With regard to pollutants,this system is primarily subject to

A) the migratory bird rule.
B) the Oil Pollution Act.
C) the Rivers and Harbors Appropriations Act.
D) the Safe Drinking Water Act.

Question 72

Fruitful Garden Company makes and sells pesticides.For the pesticides to remain on the market,the acceptable level of risk to people of developing cancer from ex?posure to the products is

A) one in a hundred.
B) one in a million.
C) one in a thousand.
D) zero.