BUS 203 Lesson 12- Unfair Trade Practices and the FTC

The FTC requires that the word "new" can only be used in advertisements to refer to products that are _____.

less than six months old

A company promising that its multi-vitamin can heal diseases would be an example of _____.

exaggerating performance

Paying people to praise a product and not revealing that they were paid would likely be considered _____.

false endorsement

The Wheeler-Lea Act was mainly focused on _____.

addressing false advertising

When was the FTC created?

1914

The FTC is now divided into _____.

bureaus

Which is an example of an issue the Bureau of Economics would likely address?

the struggle of a city's economy in the wake of an FTC action

What was the main reason the FTC was originally founded?

to address the problem of monopolies and trusts

What is the primary role of the Federal Trade Commission (FTC)?

to enforce consumer protection laws

A case of industry-wide price gouging would likely be handled by the _____.

Bureau of Competition

The FTC and the _____ share responsibility for enforcing antitrust laws.

Dept of Justice

True or false: The Bureau of Competition would likely investigate telemarketing fraud.

False

True or false: The Federal Trade Commission (FTC) is mainly focused on regulation of the financial industry.

False

Which of the following best describes how consumers can seek legal recourse for unfair trade practices?

They can sue for damages by showing that the practice itself was unfair or deceptive.

True or false: As used in advertisements, the word "cure" would likely be a term looked at carefully by the FTC

True

True or false: Targeting vulnerable populations would be considered an unfair trade practice.

True

True or false: The FTC has the power to bring federal litigation.

True

True or false: The International Paper Company was one of the highly consolidated trusts that the FTC was created to address.

True

One of the business conglomerates that prompted the creation of the FTC was _____.

US Steel

Which of the following best defines "bait and switch"?

advertising one item and then selling another in its place

Price controls are a direct response to _____.

price fixing

Replacing an advertised product with an inferior product would likely be defined as _____.

bait and switch

Around the time of the FTC's founding, _____ controlled most of the industries that produced household necessities.

conglomerates

The goal of the Consumer Protection Act is to provide consumers the opportunity to make _____ decisions about the goods and services they purchase.

informed, rational

To sue for damages in an unfair trade practices lawsuit, consumers need to prove that a seller _____.

misrepresented or misled

Which of the following would likely be considered unfair trade practices? Select all that apply.

non-compliance with manufacturing standards coordinated price gouging bait and switch

Which of the following would be considered an example of withholding pertinent information?

not disclosing the full price of a product

Around the time of the FTC's founding, perceived unfair practices by consolidated trusts and monopolies prompted calls for _____.

price controls

Which act broadened the power and jurisdiction of the FTC in the 1930s?

the Wheeler-Lea Act

Deceptive telemarketing efforts often target which of the following groups? Select all that apply.

the elderly those who don't speak English