Con Ed- Chapter 3

company promise that its products will meets specific standards over a given time period, or company will repair/replace it/refund

warranty

MC: 15. An item priced below cost to attract the consumer to the store is called a ___________. a. loss leader b. real sale c. price reduction d. gimmick

A

MC: 21. Ivette has just begun her first year of teaching sixth graders at a local elementary school. She would like to educate her students about their consumer rights and responsibilities and how to resolve disputes between consumers and sellers. She would also like to provide her students with printed booklets and other information. Whom can she contact locally? a. BBB b. FTC c. CPSC d. EPA

A

MC: 9. Which of the following is responsible for protecting consumers from unfair or deceptive business practices, such as misleading information in advertising or on product labels? a. FTC b. CPSC c. EPA d. IRS

A

MC: 11. Which of the following was created to protect consumers from dangerous products? a. FTC b. CPSC c. EPA d. IRS

B

MC: 16. Deliberate deception, designed to secure unfair or unlawful gain, is a. legal b. fraud c. permissible d. ethical

B

MC: 17. A type of financial fraud in which people pay to join an organization in exchange for the right to sell memberships to others is called a _______________. a. a circle scheme b. a pyramid scheme c. a square scheme d. a geometric scheme

B

MC: 18. In solving a problem you have with a product that you have purchased, you should start with the a. manufacturer b. seller c. Better Business Bureau d. state Attorney General's office

B

MC: 20. Last week Danny received a letter in the mail. This letter contained a list of names with addresses and some instructions. In the instructions he was told to mail a dollar to the person on the top of the list, place his name at the bottom of the list, and then mail the same letter to ten friends. This situation is an example of what type of fraud? a. bait and switch b. pyramid scheme c. trading up d. piggyback swindle

B

MC: 24. Sunday morning Gilbert examined the advertisements in his local newspaper and found that one retailer offered a low price on the brand of athletic shoes he wanted to purchase. Later he drove to the store and purchased not only the shoes but also several pairs of athletic socks, a baseball cap, and a T-shirt. The retailer accomplished his goal of getting Gilbert into the store not only to buy the low priced product but also to buy other products at full price. What did the retailer use to attract Gilbert to the store? a. trading up b. loss leader c. bait and switch d. deceptive advertising

B

MC: 26. Brown's Camera Store ran an advertisement offering self-loading 35mm cameras for $49.95. After seeing the advertisement, Andy drove to Brown's intending to purchase the advertised camera. Once there, however, the salesperson told Andy that the advertised camera was out of stock and eventually convinced Andy to buy a more expensive model because the sale model was not really that good anyway. This advertising technique is known as __________. a. trading up b. bait and switch c. loss leader d. fraud

B

MC: 28. The town of Millwood is a community of 120,000 residents. Two newspapers exist in Millwood, The Millwood Times and The Millwood Post. Whenever new residents move to Millwood, The Millwood Times gives them a free six-month subscription. The owners of The Millwood Post can't afford to make this offer. They believe that The Millwood Times is using this practice to force them out of business. If The Millwood Times continues its practices, it could become a _____________ . a. warranty b. monopoly c. deception d. competitor

B

MC: 10. Which of the following was created to enforce laws that protect our environment? a. FTC b. CPSC c. EPA d. IRS

C

MC: 12. A company's written promise that the product will meet specific standards over a given time period is the product's ______________. a. advertising b. public image c. warranty d. trademark

C

MC: 13. An unwritten guarantee that the product is of sufficient quality to fulfill the purpose for which it was designed is known as a(n)_____________ a. full warranty b. limited warranty c. implied warranty d. conditional warranty

C

MC: 14. The practice of pressuring consumers to buy a more expensive product than what they had intended is called a. jumping prices b. inflating prices c. trading up d. moving on

C

MC: 19. A few weeks ago Iliana was watching an infomercial on television regarding a fitness device that was both portable and durable. The device was advertised as "easy to assemble" and light enough to be transportable for "fitness on the road" yet strong enough to give her a good aerobic workout. Because Iliana travels extensively, this device seemed to be just what she needed! She paid $99.99 for it. When the device arrived, it was difficult to assemble. The parts were so light that when she used the device it bent and became unusable. Iliana feels she is a victim of misleading advertising. Whom should she contact? a. CPSC b. the television station that aired the commercial c. FTC d. EPA

C

MC: 23. Three months ago Shawn purchased a CD player from a local music store in town. In its packing material he found paperwork stating that the CD player was in fact guaranteed for one full year. He read that the company would replace a defective product within one year at no charge as long as he could provide his receipt and would file a written claim with the company. This type of guarantee is known as a(n) ____________. a. implied warranty b. limited warranty c. full warranty d. conditional warranty

C

MC: 27. Yesterday Lorena's neighbor, Debi, told her about the wonderful vacuum cleaner she had purchased from their mutual friend, Don. Lorena called Don and asked if he would come to her house and demonstrate the vacuum cleaner to her. Lorena was so impressed with the vacuum cleaner's versatility and ease of use that she immediately purchased it. She signed the sales contract in her home and agreed to pay for the vacuum cleaner using her credit card. Gary, Lorena's husband, was furious because he felt the vacuum cleaner was just too expensive! So, the next day Lorena called Don and asked him to cancel the agreement. Don was obligated to follow Lorena's wishes according to _________________. a. FTC guidelines b. truth-in-information laws c. cooling-off period d. CPSC guidelines

C

Completion: 35. Dennis and Jody recently purchased "The Avenger"—a toy for their son, Nathan. "The Avenger" is battery operated, shoots small plastic bullets from a rotating firing device, and moves forward and backward. While Nathan is playing with the toy, "The Avenger" shoots him near the right eye. His parents rush him to the hospital to be treated. They should file a complaint regarding the safety of the toy with the _______________.

CPSC

MC: 22. Competition is an important part of the success of our economy. Why is it important to all consumers? a. consumers have the right to choose between products b. competition encourages manufacturers to continually improve products c. consumer needs and wants will better be met d. all of the above

D

MC: 25. Recently, Ally learned that she has several food allergies. Her doctor has instructed her to check product labels on all foods she purchases and eats. However, Ally often eats at a local fast-food restaurant with her friends during lunch. Which portion of the Consumer Bill of Rights gives her the right to ask the restaurant owner for information regarding the ingredients in the foods she will select? a. right to redress b. right to choose c. right to be heard d. right to be informed

D

T/F: 1. Businesses are required by law to supply consumers with accurate information about their products and those of competitors.

F

T/F: 5. The Consumer Bill of Rights has no relationship to any consumer responsibilities.

F

T/F: 6. The Right to Be Heard requires the government to do what consumers want when creating laws.

F

T/F: 2. The Right to Redress assures consumers that they should be able to obtain fair remedies to their consumer problems.

T

T/F: 3. Businesses are not required to provide written warranties for the products they manufacture or sell.

T

T/F: 4. Many laws have been passed to discourage businesses from polluting the environment.

T

T/F: 7. The Right to Choose promises consumers that there will be competition for their business among producers.

T

T/F: 8. Fraud happens when a seller knowingly makes false claims about a product with the intention of receiving something of value that he or she does not deserve.

T

An important third-party will hear both sides of a dispute & will make a decision

arbitration

Completion: 31. The practice of baiting consumers with an advertised, but nonexistent, bargain and then switching them to a more expensive product is called _______________.

bait & switch

the practice of "baiting" consumers w/ an advertised but nonexistent bargain & then "switching" them to a more expensive product when they arrive at the store

bait & switch

Completion: 34. Guillermo recently saw an advertisement for a 13" color television selling for $129.95. He drove to the store to purchase the item only to find that the item is out of stock. A salesclerk walks him over to another aisle of televisions showing him better and more expensive models than the one advertised. The store and the salesclerk have engaged in _______________.

bait & switch fraud

a nonprofit business-sponsored agency w/ local offices dedicated to educating consumers, helping to resolve disputes, & promoting honest business practices

better business bureau (BBB)

Completion: 41. The McMillan Company runs a television advertisement that offers genuine leather cowboy boots for only $19.95. The ad gives the company's 800 number and web site for placing orders. Stephen orders the boots using the company's web site. However, when the boots arrive, they are not made from leather at all. Rather, the boots are made from a synthetic material made to look like leather. Stephen contacts the FTC and learns that hundreds of customers have called and filed complaints. The FTC can issue a(n) ________________ to the McMillan Company to stop its deceptive advertising.

cease & desit

an administrative/judicial order requiring a business to stop conducting unfair/deceptive practices such as deceptive advertising

cease-&-desist order

a contest among sellers to win customers

competition

Completion: 29. The contest among sellers to win customers is known as _______________.

compition

efforts to protect & inform consumers by requiring such practices as honest advertising, product warranties, & improved safety standards

consumer movement

a federal agency that protects consumers from dangerous products

consumer product safety commission (CPSC)

a specified period of time w/i which a consumer can back out of an agreement to buy something

cooling-off period

federal agency responsible for enforcing laws that protect the environment

environmental protection agency (EPS)

federal agency responsible for protecting consumers from unfair/deceptive business practices, such as misleading info. in advertising/on product labels

federal trade comission (FTC)

deliberate deception, designed to secure unfair/unlawful gain

fraud

a written promise that the company will repair/replace a defective product w/i a specified time period at no change

full warranty

Completion: 36. Edwin owns and operates a local plumbing business. Juliana, one of his long-time customers, has asked if he would replace the toilet in her master bathroom. They discuss the product she will purchase as well as the amount of labor involved in the installation. Although there is no written warranty for the toilet, there is a(n) ________________ that it will work properly after it is installed.

implied warranty

an unwritten guarantee that the product is of sufficient quality to fulfill the purpose for which it is designed

implied warranty

a court that handles suits for small dollar amounts w/o the services of a lawyer

small claims court

Completion: 33. Lucia and Sergio are looking for a new home. They drive to the outskirts of town and find homes in the price range they can afford. They look through the model homes and find a floor plan they like and decide they will contact the developer to begin the process of having their home built. Lucia's sister remembers that the area where these homes are being built was once the location of the city's landfill. The home developer might have violated the right to _______________.

informed or right to help the environment

a written warranty that doesn't meet the standards of a full warranty because of specified warranty

limited warranty

Completion: 32. In most cases, federal agencies work to solve national consumer issues, and state and local governments protect consumers in _______________ situations.

local

a product priced below cost to attract customers to the store

loss leader

a company that has an unfair advantage over competitors in an area of businesses

monoply

Completion: 30. A company that has an unfair advantage over competitors in an area of business is a(n) _______________.

monopoly

a type of financial fraud in which people pay to join an organization in exchange for the right to sell memberships to people

pyramid scheme

Completion: 38. Last spring Jefferson Tran purchased a new refrigerator from a local appliance store. The refrigerator came with a full two-year warranty. If a problem occurred, the appliance store agreed to send someone to Jefferson's home at no cost to repair the appliance. In July the refrigerator seemed to be cooling less effectively and dairy products were spoiling. Jefferson contacted the appliance store; the service manager told Jefferson that his brand of refrigerator does not cool well during the summer months. Jefferson was outraged! Under the Consumer Bill of Rights, he has the right to _______________.

redress

to seek & receive a remedy to a problem

redress

Completion: 42. Moriah is concerned about the safety of certain plastic toys manufactured by a local business. She is also concerned about air and ground pollution associated with this manufacturing plant. Moriah organizes a committee of concerned citizens whose purpose will be to inform local and state officials about these issues. At the organizational meeting, she should emphasize her rights to _______________.

safety & a healthy environment

Completion: 37. Susana recently contracted with Lawns R Us to have a sprinkler system installed in her front yard. The total cost of the contract was $2,500. Upon completion of the work, Susana paid Lawns R Us the $2,500. Two weeks later the sprinkler system began malfunctioning. She contacted the owner of Lawns R Us, but he refused to send anyone out to repair the system. She has filed a complaint with the Better Business Bureau. She can also pursue inexpensive legal action in a(n) _______________.

small claims court

Completion: 40. Roberta is an elderly woman living alone. She often receives phone calls from telephone solicitors and telemarketers. One particular telemarketer offers her free information on installing new air conditioners at discount prices for adults over 80. Roberta's air conditioner is malfunctioning; she believes she will need a new one this next summer. She agrees to have the information sent to her. The telemarketer asks her to give her full name, social security number, and credit card number so that he can verify her identity and address. Roberta is told she must act now in order to receive the coupons for the discount. She agrees. She could be the victim of _______________.

telephone fraud

practice of pressuring consumers to buy a more expensive product than they intended

trading up