LWC1 Chapters 39,40,41 Sample Test Questions

--Chapter 40-- If a consumer cancels a door-to-door sale within the required time, how many days does the seller have to return the buyer's money?

ten.

--Chapter 39-- he Chicago School's position on antitrust legislation would be to ask:

"Has competition been harmed?"

--Chapter 41-- The Clean Air Act of 1970 directed the EPA to reduce automobile pollution levels by:

90 percent within 6 years.

--Chapter 40-- The Fair Debt Collection Practices Act prohibits which of the following practices?

A debt collector falsely representing himself as a lawyer.

--Chapter 41-- Which of the following Acts sets goals without regard to the cost involved in meeting the goals?

Both the Clean Water Act and the Clean Air Act.

--Chapter 41-- Coastal City Power Plant received its annual sulfur dioxide emission allowance. Because it is using a low-sulfur fuel which burns cleaner than some fuels, it does not need its entire allowance this year. Coastal:

may sell its leftover allowance to another company.

--Chapter 41-- What prevents the market system from achieving a clean environment on its own?

Externalities.

--Chapter 39-- Which of the following is a cooperative strategy that allows companies to work together to their mutual advantage?

Horizontal agreements. Vertical agreements. Mergers and joint ventures. --ALL OF THE ABOVE--

--Chapter 40-- Mabel is a single, 40-year-old who has borrowed money on numerous occasions. Her payment record has been good, except she has been delinquent in paying a few bills. Which of the following is true regarding credit information gathered on Mabel?

If Mabel is rejected for a loan because of the consumer report, the lender must tell her the source of the report.

--Chapter 39-- The most accurate statement about the Robinson-Patman Act is:

It has rarely been enforced in recent years.

--Chapter 41-- James owned real estate. He leased the building to two tenants. An insurance agent leased the first floor and a law firm leased the second floor. James sold the land to Mary, who used the entire building for her business. She discovered that there were underground storage tanks buried in the land. She had to remove the tanks and then sued James and the former tenants for the cost of removing the tanks, even though none of them knew the tanks had been there.

James is liable to Mary, but the tenants are not.

--Chapter 41-- Under Superfund legislation, to what extent must a hazardous waste site be cleaned?

Pristine condition, regardless of cost, even if this is better than it was before the hazardous waste was dumped onto it.

--Chapter 41-- Under the Clean Air Act:

states and the EPA were to act as partners wherein the individual states would formulate State Implementation Plans to meet primary and secondary standards created by the EPA.

--Chapter 39-- Pat's Pen Co. manufacturers and sells an inexpensive ball-point pen. Salley's Stationery purchases the pens for $.25 each in quantities of 1,000. Salley's discovered that a national chain, a competitor of Salley's, buys the pen at $.20 for 1,000. If Salley's Stationery sues Pat's Pen Co. for price discrimination:

Salley's Stationery will win unless Pat's Pen Co. can justify the price differential.

--Chapter 39-- The U.S. Attorney General brought a Sherman Act lawsuit against competitors in the widget market. The Attorney General alleged that these companies agreed to charge $20 for widgets. Which of the following defenses may apply?

That the businesses did not agree to charge $20 for widgets.

--Chapter 41-- What administrative agency regulates pesticides, insecticides, fungicides and rodenticides?

The EPA.

--Chapter 41-- Congress established a trust fund for the EPA to use in Superfund cleanup. This trust fund was initially financed by a tax on what?

The oil and chemical industries.

--Chapter 41-- Acid rain is caused primarily by:

sulfur emissions from coal-burning utility plants.

--Chapter 40-- Which of the following statements express the purpose of the Truth-in-Lending Act?

To provide consumers with information necessary to make the best credit decision.

--Chapter 40-- Grady receives a $2,940 credit card bill in the mail from a company with which he doesn't have an account. He fears he is a victim of identity theft. Does he have any recourse?

Yes, under the Fair and Accurate Credit Transactions Act (FACTA), Grady can place an alert in his credit files using the National Fraud Alert System.

--Chapter 40-- "Bait and switch" is:

advertising goods, then pressuring the customer to buy other, more expensive goods.

--Chapter 40-- Ron's Furnace Repair advertised it would inspect any homeowner's furnace for free. Janet had Ron's come to inspect her furnace. The servicewoman dismantled the entire furnace then refused to put it back together unless Janet paid her $250. The FTC considers such a practice to be:

an unfair practice. a deceptive practice. an act that violates public policy. --ALL OF THE ABOVE--

--Chapter 39-- If a company has violated antitrust laws:

any private person or company that has been harmed by the violator can file a lawsuit to recover damages.

--Chapter 39-- Ed was an independent owner of a chain of TV stores. He successfully got customers into his store by cutting his prices on widely advertised name-brand products in order to sell other products for which he received a bigger profit. When the manufacturers of three of the name-brand products discovered Ed's actions, they agreed secretly to stop selling him their TVs. The three manufacturers:

are engaged in a rule of reason violation of the antitrust laws.

--Chapter 41-- The EPA brought an administrative action against Boch Industries for violating the Clean Air Act. The administrative law judge ruled in the EPA's favor. Boch Industries:

can appeal the decision to a U.S. Court of Appeals and then to the U.S. Supreme Court.

--Chapter 40-- Don received in the mail merchandise he never ordered. The package was addressed to him, and when he opened it he saw a brochure stating he could keep the products for only $19.95. If he chose not to keep the products he was instructed to mail them back within five days. Don:

can keep and use the merchandise without having to pay for it.

--Chapter 39-- What law prohibits mergers that are anti-competitive?

clayton act.

--Chapter 41-- The Environmental Protection Agency (EPA) was created by Congress to:

consolidate environmental regulations under one agency.

--Chapter 39-- A marketing representative who is tempted to engage in price-fixing due to heavy competition and similar prices for competitors' products should:

emphasize factors of her product that do not involve price. emphasize service, reliability, and other factors of her company. understand the serious criminal and civil penalties of engaging in price-fixing. --ALL OF THE ABOVE--

--Chapter 41-- Environmental issues are regulated by:

federal statutory law. state statutory law. administrative regulations. --ALL OF THE ABOVE--

--Chapter 39-- Gorhan Construction, Brighton Bros., and Tirenn Construction agreed that on three upcoming projects, Gorhan would bid lowest on one, Brighton would submit the lowest bid on the second project, and Tirenn would submit the lowest bid on the third project. In this way, they would each be assured of work for the upcoming season. This behavior:

is a per se violation of the Sherman Act.

--Chapter 39-- Assume that General Motors, Ford, and Chrysler all merged into one car company. Such a merger would be a:

horizontal merger

--Chapter 40-- The Consumer Leasing Act requires a lessor to disclose in writing all EXCEPT:

lease rates of the competition.

--Chapter 39-- When the per se standard applies, the plaintiff:

needs only to prove the existence of the conduct.

--Chapter 41-- Federal law regulates:

point source but not non-point source pollution.

--Chapter 41-- EPA regulations limiting soot:

primarily affected power plants and producers of vehicles and equipment which use diesel fuel.

--Chapter 39-- Horizontal cooperative strategies would include all EXCEPT:

reciprocal dealing.

--Chapter 40-- A company advertised a pain relief ointment called "Aspercreme." The package stated "the strong relief of aspirin right where you hurt." The product did not contain any aspirin. The FTC ruled that:

the advertising was deceptive, and the FTC required the company to specifically state in its promotions that the product did not contain aspirin.

--Chapter 40-- Marla applies for and receives a three-year loan through Sharkey Lenders for $5,000 at 27% APR.If the loan agreement violates the applicable usury statute, Marla may be able to keep:

the interest that exceeds the usury limit. all of the interest on the loan. the interest and the $5,000. --Any of the answer choices are possible, depending on where the loan was made.--

--Chapter 40-- Under FTC rules, a customer can cancel a door-to-door sales contract within:

three business days of the sale.

--Chapter 39-- The Clayton Act:

was passed to clarify the provisions of the Sherman Act.

--Chapter 40-- Millie ordered clothes from a mail order catalog. No time was specified as to when the goods would be shipped. In such a case the FTC requires that the company must ship the goods to Millie:

within 30 days after receipt of the order.