BUS 309 Week 6 Quiz – Strayer
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Quiz
5 Chapter 6
Chapter
6—Consumers
MULTIPLE
CHOICE
1. The case of MacPherson v. Buick Motor Car
in 1916 changed product liability law. As a result of it, the courts
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a.
|
permitted
consumers to sue manufacturers with whom they had no contractual
relationships.
|
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b.
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adopted
the principle of caveat emptor.
|
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c.
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permitted
consumers to sue the retailer from whom they had purchased the product.
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d.
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adopted
the principle of strict liability.
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2. According to the legal doctrine of strict
product liability,
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a.
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the producer
of a product is responsible for any injury the consumer suffers.
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b.
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consumers
must assume all risk whenever they buy a product.
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c.
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product
liability presupposes negligence by more than one party.
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d.
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a
manufacturer need not be negligent to be held liable for a defective product.
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3. Which statement is accurate in its
description of consumer protection?
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a.
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The
Consumer Product Safety Commission has the power to order recalls.
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b.
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Statistics
show that, in fact, safety regulations rarely succeed in increasing safety.
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c.
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Critics
agree that the cost of safety regulations and product recalls are negligible.
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d.
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Safety
regulations permit people to choose to save money by purchasing riskier (but
less expensive) products.
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4. Legal paternalism is the doctrine that the
law
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a.
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may
justifiably restrict the freedom of the individual for his or her own good.
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b.
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may
justifiably forbid lawsuits against those who act paternalistically.
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c.
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should
encourage business to develop a paternal sense of responsibility for
consumers.
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d.
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should
only restrict people's freedom in order to protect other people.
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5. "Puffery" is an example of which of
the following deceptive or misleading advertising techniques?
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a.
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ambiguity
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c.
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psychological
appeals
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b.
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exaggeration
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d.
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concealed
facts
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6. For years Bayer aspirin advertised that it
contained "the ingredient doctors recommend most." This is an example
of
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a.
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ambiguity.
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c.
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exaggeration.
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b.
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psychological
appeals.
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d.
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concealed
facts.
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7. The case of FTC v. Standard Education
was important in the legal transition
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a.
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toward
the principle of caveat emptor.
|
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b.
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toward
something like the ignorant consumer standard.
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c.
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toward
the reasonable-person standard.
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d.
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that
removed power from the Federal Trade Commission (FTC).
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8. In deciding whether an ad is deceptive, today
the FTC basically follows
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a.
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the
reasonable consumer standard.
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c.
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a
"modified" ignorant-consumer standard.
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b.
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the
ignorant/gullible consumer standard.
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d.
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none
of the above.
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9. Harvard business professor Theodore Levitt
has
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a.
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drawn
an analogy between advertising and art.
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b.
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proven
the possibility of effective subliminal advertising.
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c.
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argued
that the process of production today creates the very wants it then satisfies.
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d.
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invented
the concept of "puffery".
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10. According to Galbraith's "dependence
effect,"
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a.
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production
depends upon wants.
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b.
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advertising
depends on the wants of the consumer.
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c.
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producers
use advertising to shape consumer wants.
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d.
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advertising
depends on consumerism.
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11. Advertising
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a.
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makes
the market more efficient.
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b.
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maximizes
consumer well-being (thanks to the invisible hand).
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c.
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can't
be restricted without violating the moral rights of advertisers.
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d.
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subsidizes
the media.
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12. Critics of advertising generally agree that
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a.
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advertising
rarely gives consumers much useful information.
|
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b.
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brand
loyalty increases price competition.
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c.
|
restrictions
on advertising violate the moral rights of advertisers.
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d.
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advertising
can only influence us if we want it to.
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13. Caveat emptor means
|
a.
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strict
product liability
|
|
b.
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due
care
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c.
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let
the buyer beware
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d.
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the
customer and manufacturer meet as equals
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14. Before the case of MacPherson v. Buick
Motor Car in 1916, the law based a manufacturer's liability for injuries
due to a defective product on
|
a.
|
the
principle of strict liability.
|
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b.
|
the
direct contractual relationship between the producer and the consumer.
|
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c.
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the
principle of the reasonable person.
|
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d.
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whether
or not the manufacturer exercised due care.
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15. Due care is
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a.
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based
on the principle of caveat emptor.
|
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b.
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based
on the principle "let the buyer beware."
|
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c.
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the
idea that consumers and sellers do not meet as equals and that consumer's interests
are particularly vulnerable to being harmed by the manufacturer.
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d.
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based
on the principle of absolute liability.
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16. Which statement is true from an ethical
perspective?
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a.
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The
argument for strict liability is basically utilitarian.
|
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b.
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Strict
liability is identical with absolute liability.
|
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c.
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The
concept of due care is identical with that of caveat emptor.
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d.
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The
argument for due care is basically Kantian.
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17. In 1972 Congress created one of the most
important agencies for regulating product safety. This agency is the
|
a.
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Securities
and Exchange Commission.
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c.
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Fair
Packaging and Labeling Commission.
|
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b.
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Federal
Drug Administration Agency.
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d.
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Consumer
Product Safety Commission.
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18. Every year ___________ of Americans require
medical treatment from product related accidents.
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a.
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tens
of thousands
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c.
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millions
|
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b.
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hundreds
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d.
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hundreds
of thousands
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19. People generally speak of two kinds of
warranties. What are these two kinds of warranties?
|
a.
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express
and implied
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c.
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limited
and unlimited
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b.
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positive
and negative
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d.
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legal
and moral
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20. Which of the following is an example of price
gouging?
|
a.
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Selling
World Series Tickets for $300.
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