Question 1

The Truth in Lending Act applies to ________.

Accepted Answer

A)  loans to a natural person
B)  loans to a natural person and to a limited partnerships
C)  loans to a natural person,loans to a limited partnership,and loans to a general partnership
D)  loans to a natural person,loans to a limited partnership,loans to a general partnership,and loans to a corporation
E)  all loansF) B) and E)
G) A) and D)

Question 2

If your credit card is stolen and you notify the credit card company before unauthorized charges are made,for what amount can you be held liable to the credit card company for later unauthorized charges?

Accepted Answer

A)  $500
B)  $300
C)  $250
D)  $200
E)  0F) A) and B)
G) A) and C)

Question 3

A multiple-product order is a form of cease-and-desist order the Federal Trade Commission issues that applies not only to the product that was the subject of its action against a company for deceptive advertising,but to other products produced by competing companies as well.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not a requirement of the Federal Trade Commission's 1984 Used Motor Vehicle Registration Rule?

Accepted Answer

A)  A dealer must attach a buyer's guide label to any used car he or she is attempting to sell.
B)  The buyer's guide label must state that the car is being sold as is.
C)  The buyer's guide label must warn the customer that the seller is not guaranteeing anything at all about the performance of the car.
D)  The buyer's guide label must include a suggestion for the buyer to obtain an inspection of the used car before any decision to purchase.
E)  The buyer's guide label must include notice of a 30-day or 3,000-mile (whichever comes first) warranty on the car.F) A) and B)
G) A) and C)

Question 5

Which of the following is true regarding the obligation,if any,of a consumer who discovers that a company has sent the consumer unsolicited merchandise?

Accepted Answer

A)  The consumer may treat the merchandise as a gift.
B)  The consumer may only treat the merchandise as a gift if it has a value of under $25; otherwise,the consumer must call the seller and ask if the seller would like to cover return postage.
C)  The consumer may only treat the merchandise as a gift if it has a value of under $50; otherwise,the consumer must call the seller and ask if the seller would like to cover return postage.
D)  The consumer may only treat the merchandise as a gift if it has a value of under $100; otherwise,the consumer must call the seller and ask if the seller would like to cover return postage.
E)  The consumer must return the merchandise.F) A) and D)
G) A) and C)

Question 6

Which of the following is not a federal law referenced in the textbook that regulates product labeling?

Accepted Answer

A)  The Wool Products Labeling Act
B)  The Fur Products Labeling Act
C)  The Flammable Fabrics Act
D)  The Nutrition Labeling and Education Act
E)  The Imported Canine and Feline Fur ActF) A) and B)
G) A) and C)

Question 7

If an advertisement is a half-truth,the advertiser is deceiving the consumer.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following was the ruling by the United States Supreme Court in Food and Drug Administration Et Al.v.Brown & Williamson Tobacco Corporation Et Al.,the case in the textbook involving whether the Food and Drug Administration has jurisdiction to regulate tobacco products?

Accepted Answer

A)  The Food and Drug Administration has jurisdiction over tobacco products.
B)  The Food and Drug Administration has jurisdiction over tobacco products,but only to the extent that any advertisement may be directed to children.
C)  The Food and Drug Administration has jurisdiction over tobacco products,but only to the extent that it may regulate warnings on packages of tobacco products.
D)  The Food and Drug Administration does not have jurisdiction over tobacco products.
E)  The Food and Drug Administration does not have jurisdiction over tobacco products unless deceptive advertising is involved.F) A) and D)
G) B) and D)

Question 9

A credit card company may not bill a consumer for a damaged item that is unknowingly purchased with the card if the ________.

Accepted Answer

A)  consumer purchased the item in the same state as the consumer's home or within 100 miles of the consumer's home
B)  consumer purchased the item in the same state as the consumer's home or within 100 miles of the consumer's home,and the item cost more than $50
C)  consumer purchased the item in the same state as the consumer's home or within 100 miles of the consumer's home; the item cost more than $50; and the consumer made a good-faith effort to resolve the dispute,such as asking the store for a refund
D)  consumer purchased the item in the same state as the consumer's home or within 100 miles of the consumer's home; the item cost more than $50; the consumer made a good-faith effort to resolve the dispute,such as asking the store for a refund; and the seller has a history of selling defective merchandise
E)  consumer has used the item for personal reasons and/or in the ordinary course of the consumer's business.F) B) and D)
G) B) and C)

Question 10

The United States Congress created the Federal Trade Commission (FTC) through the Federal Trade Commission Act of ________.

Accepted Answer

A)  1900
B)  1914
C)  1929
D)  1934
E)  1976F) C) and D)
G) A) and E)

Question 11

The Federal Hazardous Substances Act of 1960 requires all items containing dangerous substances to carry warning labels.

Accepted Answer

A) True 
 B)False

Question 12

Miracle Pill.Katie advertised that she had developed a pill for women that would result in weight loss,wrinkle loss,and improved vitality; and for men would result in all those things,plus hair growth.Her television advertisement showed miracle results allegedly obtained by consumers.Katie cautioned,however,that ingestion of the pill for six months was required before results would be evident.The pill was wildly popular.The Federal Trade Commission,however,investigated and determined that Katie had failed to have a reasonable basis for the claims she made in advertisements.Katie claimed that she was merely involved in the use of generalities and clear exaggerations.The Federal Trade Commission disagreed and issued a formal administrative complaint against her.After a hearing,the Federal Trade Commission issued an order requiring that Katie stop advertising and selling the pills.After losing all appeals,Katie continued selling the pills until she was fined by the Federal Trade Commission.She has since left the country and cannot be located.Who would have presided over the hearing involving the administrative complaint filed against Katie by the Federal Trade Commission?

Accepted Answer

A)  A state circuit court judge
B)  A federal district court judge
C)  An administrative law judge
D)  A panel of commissioners of the Federal Trade Commission
E)  The full commission of the Federal Trade CommissionF) B) and E)
G) D) and E)

Question 13

________ credit permits repeated transactions and assesses a finance charge on unpaid balances.

Accepted Answer

A)  Open-end
B)  Closed-end
C)  Debt-based
D)  Uncollateralized
E)  CollateralizedF) All of the above
G) B) and D)

Question 14

Which of the following is a correct statement regarding government regulation of tobacco industry advertising?

Accepted Answer

A)  The federal government does not regulate cigarette advertising.
B)  The federal government does not regulate smokeless tobacco advertising.
C)  The tobacco industry's advertising is regulated through one act: the Public Health Cigarette Smoking Act of 1970.
D)  The tobacco industry's advertising is regulated through two acts: the Public Health Cigarette Smoking Act of 1970 and the Smokeless Tobacco Health Education Act of 1986.
E)  The federal government does not regulate cigarette or smokeless tobacco advertising; instead,tobacco advertising is subject to regulation by the individual states.F) A) and B)
G) B) and E)

Question 15

According to the Truth in Lending Act,credit card applications must include ________.

Accepted Answer

A)  the annual percentage rate (APR) 
B)  annual fees
C)  the grace period for paying without a finance charge
D)  the annual percentage rate (APR) ,annual fees,and the grace period for paying without a finance charge
E)  the annual percentage rate (APR) and the annual fees,but not the grace period for paying without a finance chargeF) C) and D)
G) A) and D)

Question 16

What is required by the Telemarketing Sales Rule of 1995?

Accepted Answer

To give consumers more protection agains...

Question 17

The Burial Emporium.Fred operates a funeral home called Fred's Burial Emporium.Fred likes to keep things simple.He has one flat price with no itemization and requires that customers purchase a complete package from him if they want any services whatsoever.Fred also goes door-to-door selling funeral packages.He tries to visit neighborhoods in which a recent death has occurred because residents in the neighborhood will have final arrangements on their minds.He believes and informs customers that once customers sign a contract for burial services,there is no backing out.Fred also obtains a good deal of business from phone solicitation.He enjoys calling late at night,between 10 p.m.and 11 p.m.,when people are tired but before they go to bed.He believes that if people do not feel well,they are more likely to consider funeral arrangements.After some pesky consumer complaints,the Federal Trade Commission and other federal agencies investigate Fred.He hires a good lawyer with his profits in an attempt to stay out of trouble.Which of the following is true regarding Fred's practice of making telephone solicitations late at night after people are tired?

Accepted Answer

A)  Under federal law this practice is legal because any consumer who does not want to talk to him can simply hang up.
B)  According to a Federal Trade Commission rule,if a telemarketer calls a residence after 9 p.m.,the telemarketer is engaging in abusive behavior; therefore,Fred is in violation.
C)  According to a Federal Trade Commission rule,if a telemarketer calls a residence before 11 p.m.,the telemarketer is not engaging in abusive behavior; therefore,Fred is not in violation.
D)  According to a Federal Trade Commission rule that is specific to funeral home directors,direct phone solicitation may not be made; therefore,Fred is in violation.
E)  According to a Federal Trade Commission rule that is specific to funeral home directors,direct phone solicitation may not be made after 7 p.m.; therefore,Fred is in violation.F) C) and E)
G) A) and B)

Question 18

The Truth in Lending Act regulates ________.

Accepted Answer

A)  open-end credit
B)  closed-end credit
C)  credit card applications and solicitations
D)  open-end credit,closed-end credit,and credit card applications and solicitations
E)  open-end credit and closed-end credit,but not credit card applications and solicitationsF) D) and E)
G) A) and D)

Question 19

Which of the following was the result on appeal in Richard D.Kennedy and Sally S.Kennedy v.Chase Manhattan Bank,U.S.A.,N.A.,the case in the textbook involving whether a bank may obtain an individual's credit report to determine whether to extend credit after providing a prequalified offer for a credit card?

Accepted Answer

A)  The court ruled in favor of the bank on the basis that the prequalification offer revealed that credit could be denied if,after the application was returned,the bank obtained credit reports and determined that the complainants did not meet the bank's standards.
B)  The court ruled in favor of the bank on the basis that banks may obtain credit reports on any loan applicant.
C)  The court ruled in favor of the bank on the basis that while banks may not obtain credit reports on each and every loan applicant regardless of circumstances,because of the risk involved,banks may obtain credit reports on any applicant for a credit card.
D)  The court ruled in favor of the plaintiff because the bank had extended an unqualified offer of a preapproved credit card and had no right to do a credit check.
E)  The court ruled in favor of the plaintiff because although the bank had a right to conduct a credit check,it had no right to deny the credit card because it was preapproved.F) D) and E)
G) A) and E)

Question 20

________ laws are statutes or administrative rules serving to protect consumer interests.

Accepted Answer

A)  Civil rights
B)  Consumer
C)  Labor
D)  Employment
E)  EnvironmentalF) None of the above
G) A) and E)

Exam 25: Consumer Law

The Federal Hazardous Substances Act of 1960 requires all items containing dangerous substances to carry warning labels.

Correct Answer
verified

The Truth in Lending Act regulates ________.

Correct Answer
verified

The United States Congress created the Federal Trade Commission (FTC) through the Federal Trade Commission Act of ________.

Correct Answer
verified

According to the Truth in Lending Act,credit card applications must include ________.

Correct Answer
verified

________ laws are statutes or administrative rules serving to protect consumer interests.

Correct Answer
verified

If an advertisement is a half-truth,the advertiser is deceiving the consumer.

Correct Answer
verified

Correct Answer
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A credit card company may not bill a consumer for a damaged item that is unknowingly purchased with the card if the ________.

Correct Answer
verified

Correct Answer
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________ credit permits repeated transactions and assesses a finance charge on unpaid balances.

Correct Answer
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The Truth in Lending Act applies to ________.

Correct Answer
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Which of the following is a correct statement regarding government regulation of tobacco industry advertising?

Correct Answer
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Which of the following is not a federal law referenced in the textbook that regulates product labeling?

Correct Answer
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If your credit card is stolen and you notify the credit card company before unauthorized charges are made,for what amount can you be held liable to the credit card company for later unauthorized charges?

Correct Answer
verified

A multiple-product order is a form of cease-and-desist order the Federal Trade Commission issues that applies not only to the product that was the subject of its action against a company for deceptive advertising,but to other products produced by competing companies as well.

Correct Answer
verified

What is required by the Telemarketing Sales Rule of 1995?

Correct Answer
verified
To give consumers more protection agains...
View Answer

Which of the following is not a requirement of the Federal Trade Commission's 1984 Used Motor Vehicle Registration Rule?

Correct Answer
verified

Correct Answer
verified

Which of the following was the ruling by the United States Supreme Court in Food and Drug Administration Et Al.v.Brown & Williamson Tobacco Corporation Et Al.,the case in the textbook involving whether the Food and Drug Administration has jurisdiction to regulate tobacco products?

Correct Answer
verified

Which of the following is true regarding the obligation,if any,of a consumer who discovers that a company has sent the consumer unsolicited merchandise?

Correct Answer
verified

Exam 25: Consumer Law

The Federal Hazardous Substances Act of 1960 requires all items containing dangerous substances to carry warning labels.

Correct AnswerverifiedShow Answer

The Truth in Lending Act regulates ________.

Correct AnswerverifiedShow Answer

The United States Congress created the Federal Trade Commission (FTC) through the Federal Trade Commission Act of ________.

Correct AnswerverifiedShow Answer

According to the Truth in Lending Act,credit card applications must include ________.

Correct AnswerverifiedShow Answer

________ laws are statutes or administrative rules serving to protect consumer interests.

Correct AnswerverifiedShow Answer

If an advertisement is a half-truth,the advertiser is deceiving the consumer.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A credit card company may not bill a consumer for a damaged item that is unknowingly purchased with the card if the ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

________ credit permits repeated transactions and assesses a finance charge on unpaid balances.

Correct AnswerverifiedShow Answer

The Truth in Lending Act applies to ________.

Correct AnswerverifiedShow Answer

Which of the following is a correct statement regarding government regulation of tobacco industry advertising?

Correct AnswerverifiedShow Answer

Which of the following is not a federal law referenced in the textbook that regulates product labeling?

Correct AnswerverifiedShow Answer

If your credit card is stolen and you notify the credit card company before unauthorized charges are made,for what amount can you be held liable to the credit card company for later unauthorized charges?

Correct AnswerverifiedShow Answer

A multiple-product order is a form of cease-and-desist order the Federal Trade Commission issues that applies not only to the product that was the subject of its action against a company for deceptive advertising,but to other products produced by competing companies as well.

Correct AnswerverifiedShow Answer

What is required by the Telemarketing Sales Rule of 1995?

Correct AnswerverifiedTo give consumers more protection agains...View AnswerShow Answer

Which of the following is not a requirement of the Federal Trade Commission's 1984 Used Motor Vehicle Registration Rule?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following was the ruling by the United States Supreme Court in Food and Drug Administration Et Al.v.Brown & Williamson Tobacco Corporation Et Al.,the case in the textbook involving whether the Food and Drug Administration has jurisdiction to regulate tobacco products?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the obligation,if any,of a consumer who discovers that a company has sent the consumer unsolicited merchandise?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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To give consumers more protection agains...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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