Ethics Exam 3, Chapter 15

21. Which of the following is (are) core rights of consumers?

A. The right to safety.

7. Deceptive advertising is still legal in most countries.

False

9. The Department of Agriculture has authority over genetically modified food and some chemicals that may affect consumers.

False

2. Consumer advocacy groups in the United States actively promote and speak for the interests of millions of consumers.

True

5. The consumer's right to privacy assures that information disclosed in the course of a commercial transaction is not shared with others unless authorized.

True

22. The "right to be heard" assures that consumers' interests will:

A. Receive full and sympathetic consideration.

40. Many companies have argued that the evolution of strict liability has:

A. Unfairly burdened them with excess costs.

16. A prime social responsibility of business is to safeguard consumers:

A. While continuing to supply them with goods and services they want.

13. One reason for business efforts to reform product liability laws is the increasing cost of insuring against liability suits.

True

17. Consumers have become more dependent on businesses for product quality because:

A. The complexity of products makes choices complicated for consumers.

33. Which of the following is a mission of the Food and Drug Administration?

A. To assure the safety and effectiveness of a wide range of consumer products.

26. Which of the following is not a goal of consumer protection laws?

B. Facilitate consumers' getting extended credit when making purchases.

27. Manufacturers making false or misleading claims about a competitor's product is:

B. Illegal and unethical.

42. Consumer groups have generally opposed the idea of product liability reform using which of the following arguments?

B. Strict liability should be retained.

43. One alternative to product liability lawsuits is called:

C. Alternative dispute resolution.

20. A goal of the consumer movement is to make consumer power:

C. An effective counterbalance to the rights and powers of firms that sell goods and services.

24. In the United States, which of the following agencies enforces the laws prohibiting deceptive advertising?

C. Federal Trade Commission.

19. Which of the following statements is not true about the organization Consumer Reports?

C. It is supported by the federal government.

31. Which agency(ies) was (were) created during the great wave of consumer regulations in the 1960s and early 1970s?

D. All of the above.

34. The major federal consumer protection agencies are authorized by law to:

D. Both A and B, but not C

35. Online shoppers have always been concerned that:

D. Information they reveal in the course of a sales transaction might be misused.

1. The Latin phrase, caveat emptor, meaning "let the seller beware" has put sellers on alert to look after their own interests.

False

10. The Environmental Protection Agency's mission is to assure the safety and effectiveness of a wide range of consumer products including pharmaceutical drugs and foods.

False

14. Quality management emphasizes high quality and customer satisfaction through continuous improvement of a company's product or service at the final stages of the production process.

False

15. Managing for product quality is an attempt by business to address its suppliers' needs.

False

3. As business firms grow in size and market power, they have increasingly lost the ability to dominate marketplace transactions with their customers.

False

6. Consumers make less rational choices when they have accurate information about a product.

False

30. Which of the following departments was established in 1914 and has been given additional powers to protect consumers over the years, including in the area of online privacy?

A. Federal Trade Commission.

28. Before deregulation, government agencies frequently:

A. Held prices artificially high, shielding businesses from competition.

38. When businesses adopt voluntary policies for protecting the privacy of individuals' information disclosed during electronic transactions, this is called:

A. Industry self-regulation.

39. Under what legal doctrine does a firm bear legal responsibility for injuries caused by something it made or sold, whether or not it was negligent or breached a warranty?

A. Strict liability.

41. Under proposals to establish uniform federal standards for determining liability:

B. Companies would not have to go through repeated trials on the same charges in different states.

18. Which organization brings together 300 nonprofit groups to espouse the consumer viewpoint?

B. Consumer Federation of America.

45. Businesses can take a number of measures to respond voluntarily to consumer demands. Which of the following is an example of such a measure?

B. Consumer call centers.

37. Advertising that is targeted to particular customers, based on their observed online behavior, is called:

C. Behavioral advertising.

25. The law requiring that toys and infant products be tested before sale is called the:

C. Consumer Product Safety Improvement Act.

36. An identifying marker placed on a user's computer hard drive during visits in order to identify the user during each subsequent visit and to build profiles of their behavior over time is called a:

C. Cookie.

32. The main responsibility of the National Highway Traffic Safety Administration is to:

C. Set motor vehicle safety standards.

44. In some cases, businesses have banded together to agree on how they will treat their customers. This is called:

C. Voluntary industry codes of conduct.

29. Which of the following limits the collection of information online from and about children under the age of 13?

D. The Children's Online Privacy Protection Act.

23. The act that requires lenders to inform borrowers of the annual rate of interest to be charged, plus related fees and services charges is called:

D. The Truth in Lending Act.

11. In the "consumer self-help" approach to protecting consumer privacy rights, new government regulations will protect the consumer online.

False

12. The doctrine of strict liability extends only to the retailer who is involved in selling the product, not the manufacturer.

False

4. Under the "right to be heard" protection, the consumer is to be assured satisfactory quality and service at fair prices.

False

8. The Children's Online Privacy Protection Act limits the collection of information online from and about children under the age of 13.

True