Deck 27: Unfair Trade Practices and the Federal Trade Commission

Question 1

The first principle of Federal Trade Commission action is that it gauges deceptive acts and practices as interpreted by the general public,not by the more sophisticated.

Answer 1

True

Question 2

Though private parties have rights under the antitrust statutes,they have no right to sue under Section 5 of the Federal Trade Commission Act.

Answer 2

True

Question 3

The little Federal Trade Commission FTC)acts are often more liberal than the federal unfair trade rules.

Answer 3

True

Question 4

The practice of saying defamatory things about a competitor's product is termed as blue sky violation.

Question 5

In the _____ Act of 1912,Congress for the first time empowered a federal agency to investigate and deter acts of unfair competition.

A)Federal Protective Service
B)Federal Emergency Management
C)Federal Trade Commission
D)Federal Law Enforcement Training
E)Federal Housing Administration

Question 6

The federal Trade Commission is limited to proving damages to individual customers case by case.

Question 7

A manufacturer withholds the details of an additional servicing cost attached to a product being offered.This is an example of disparaging a service.

Question 8

Suppose Reuben sees this advertisement about a guitar offered in a store: "Gibson Acoustic Guitar-only $50." But when he arrives at the store,he finds that the advertised guitar was "sold out." The retailer then tries to sell Reuben a higher priced guitar.The above scenario is an example of _____.

A)bait-and-switch advertising
B)vertical integration advertising
C)sweepstakes marketing
D)product diversification
E)negative option marketing

Question 9

The _____ added the words "unfair or deceptive acts or practices in commerce" to the Federal Trade Commission Act.

A)Wheeler-Lea Amendments
B)Landrum-Griffin Amendments
C)Taft-Hartley Amendments
D)Parens Patriae Amendments
E)Chandler Amendments

Question 10

_____,enacted by the Congress in 1966,helped in standardizing quantity descriptions and enabled shoppers to compare the value of competing goods in the stores.

A)The Bait and Switch Act
B)The Fair Packaging and Labeling Act
C)The Food,Drug,and Cosmetic Act
D)The Worker Adjustment and Retraining Notification Act
E)The Age Discrimination in Employment Act

Question 11

According to the Federal Trade Commission's Guides against Deceptive Pricing,a product that once had a price tag of $50,but that never actually sold for more than $40,cannot be hawked at "the former price of $50".

Question 12

Under the Federal Trade Commission FTC)Act,if you receive an unsolicited product in the mail,you may treat it as a gift and use it.

Question 13

The Trademark Law Revision Act of 1988 amended the original Warner Act that protected trademarks as intellectual property.

Question 14

A sales pitch where the retailer traps the prospective customer by dangling a very attractive offer that is disparaged once the customer arrives in the store is known as a negative-option plan.

Question 15

Which of the following is true of a Trade Regulation Rule?

A)A violation of a trade regulation rule is treated exactly like a violation of a federal statute.
B)It is a short statement on an administrative proceeding.
C)After promulgating a trade regulation rule,the federal commission must publish its intention to do so in the Federal Register and must hold open hearings on its proposals.
D)Draft versions of a trade regulation rule are seldom made available to the public.
E)Further proof is necessary even after the Federal Trade Commission proves that a defendant violated a trade regulation rule.

Question 16

A sales promotion campaign shows an expensive car but the dealer does not stock these cars.This is an example of product disparagement.

Question 17

G&Y Ltd,a yoghurt distributor,was found guilty of not disclosing the artificial flavor used in its yoghurts.From this scenario,it is clear that G&Y violated the norms of the Norris-La Guardia Act.

Question 18

The Federal Trade Commission can order a company to remove or modify a deceptive trade name.

Question 19

Guides against Deceptive Pricing are laws constituted in the Federal Trade Commission Act.

Question 20

If a fact not disclosed has a bearing on a consumer's decision whether to purchase the product,its omission might be tantamount to deception.

Question 21

The _____ is a marketing device through which the consumer responds to the seller only if he or she wishes not to receive the product.

A)open shop
B)closed shop
C)negative option
D)garnishment action
E)usury

Question 22

What is the significance of the Federal Trade Commission improvement act of 1975?

A)The act ensured that businesses with 100 or more employees gave their local bargaining unit,along with the local city or county government,at least sixty days' notice whenever a shutdown would require long-term layoffs of 500 employees.
B)This act made preferential hiring agreements between a company and its labor unions lawful.
C)This act made closed shop agreements between a company and its labor unions lawful.
D)This act authorized the commission to seek injunctions and collect monetary damages on behalf of injured consumers in cases involving violations of trade regulation rules.
E)This act ensured that organizations or companies eradicated sexual discrimination and discrimination of handicapped workers in employment.

Question 23

Hot square,a weekly business magazine,promised each reader that the person who will return the numbered ticket included in each magazine will be eligible to enter into a lucky draw.This scenario is an example of an)_____.

A)sweepstake
B)escrow
C)disparagement
D)abatement
E)escheat exception

Question 24

According to the Federal Trade Commission's Trade Regulation Rule concerning mail-order merchandise,any direct-mail merchandiser must deliver the promised goods within _____ days.

A)three
B)seven
C)twelve
D)thirty
E)sixty

Question 25

Shalom subscribed a monthly business magazine.In the context of a negative-option plan,which of the following should be followed by Shalom?

A)After reading each monthly issue,Shalom should give it away to a paper mart for recycling purposes.
B)After reading the monthly issue,Shalom should think about recycling the magazine herself.
C)Shalom should tell the magazine providers that she does not wish to receive the magazine anymore.
D)Shalom should not move out of town as her monthly subscription will go to a waste.
E)Even if Shalom is not satisfied with the matter in the magazine,she should not cancel her monthly subscription.

Question 26

Filler Inc.filed a complaint stating that Downtown Inc.indulged in damaging the reputation of its core service offering.The Federal Trade Commission will treat this as _____.

A)a negative-option plan
B)a positive-option plan
C)product disparagement
D)product abatement exception
E)bait-and-switch advertising

Question 27

Even when consumers have no direct remedy under federal law for unfair or deceptive trade practices,they may have recourse under state laws modelled on the Federal Trade Commission Act,known as the _____.

A)improvement FTC Acts
B)little FTC Acts
C)Wheeler-Lea Amendments
D)Norris-La Guardia Amendments
E)Taft-Hartley Amendments

Question 28

State a few unfair practices listed by the Federal Trade Commission FTC)in its Guides Against Bait Advertising.

Question 29

State the Federal Trade Commission's FTC's)three-part-test for determining unfairness.

Question 30

It is not a deceptive trade practice:

A)if a well-known personality endorses a product without disclosing that he or she is being paid to do so.
B)if a well-known retailer baits a prospective customer by dangling an alluring offer and removes the offer once the customer arrives.
C)for a well-known personality to endorse two competing products at the same time.
D)if a well-known seller refuses to demonstrate the advertised product.
E)if a well-known seller fails to stock enough of the advertised product to meet anticipated demand.

Question 31

_____ refers to saying defamatory things about a competitor's service offering.

A)Bait-and-switch advertising
B)Horizontal integration
C)Product disparagement
D)Vertical integration
E)Sweepstake marketing

Question 32

_____ requires a company to pay for further promotions that admits to the deception in its previous promotions and makes rectified statements that are not misleading.

A)Hot cargo agreement
B)Corrective advertising
C)Product disparagement
D)Runaway shop agreement
E)Sequestration