Question 1

Puffery is:

Accepted Answer

Puffery refers to an exaggerated or extravagant claim that is not meant to be taken literally and does not involve any explicit attempt to deceive or mislead. It is a common advertising technique used to create a favorable impression of the product or service being promoted.

Question 2

If a consent agreement cannot be reached with a company,the Federal Trade Commission (FTC)would then issue a(n):

Accepted Answer

The answer of If a consent agreement cannot be reached...

Question 3

In terms of substantiation,if an advertiser uses expert endorsements,then statements in the advertisement must be based on:

Accepted Answer

If an advertiser uses expert endorsements, the statements in the advertisement must be based on legitimate tests performed by experts in the field. This allows for the advertisement to be substantiated and provides credibility to the claims being made. The use of opinion or personal experience alone may not be sufficient to substantiate the claims.

Question 4

An advertisement or communication is deemed to be deceptive or misleading when:

Accepted Answer

Deceptive or misleading advertising occurs when a substantial number of people or the "typical person" is left with a false impression or misrepresentation that relates to the product. It is not necessary for a purchase to be made or for a competing firm to make the same claim for the communication to be deemed deceptive or misleading.

Question 5

Companies leaders that are not satisfied with the ruling of the full Federal Trade Commission (FTC)can appeal to the U.S.Court of Appeals.The danger is that companies in appealing to the Court of Appeals is that:

Accepted Answer

The answer of Companies leaders that are not satisfied with...

Question 6

The Federal Trade Commission,National Advertising Division,and the courts would consider the word "better" used in an advertisement to be:

Accepted Answer

The word "better" is considered puffery, but if it implies a comparison, it may require substantiation if challenged. This means that while it may not be deceptive or a violation of the Federal Trade Commission Act on its own, it could lead to legal trouble if challenged.

Question 7

The Wheeler-Lea Amendment to the FTC Act:

Accepted Answer

The Wheeler-Lea Amendment to the FTC Act was passed in 1938 and specifically targets deceptive and misleading advertising. It provides the Federal Trade Commission with the authority to regulate and take legal action against companies that engage in such practices.

Question 8

An administrative complaint is:

Accepted Answer

An administrative complaint is a formal proceeding before an administrative law judge used by the FTC to address violations of laws or regulations.

Question 9

If after an administrative hearing a company is still not satisfied with the ruling of the Federal Trade Commission (FTC),the next step is to:

Accepted Answer

The answer of If after an administrative hearing a company...

Question 10

In terms of a judgment by the Federal Trade Commission against a company for false or misleading advertising,which of the following would come first?

Accepted Answer

The answer of In terms of a judgment by the...

Question 11

When the Federal Trade Commission (FTC)insists that a company stop making a false claim in an advertisement and that company agrees to stop,it is an example of a:

Accepted Answer

A consent order is an agreement between the FTC and a company that the company will stop engaging in certain practices that the FTC considers to be illegal or deceptive. By agreeing to the consent order, the company avoids a formal administrative complaint or legal action. The company must comply with the terms of the consent order, which may include payment of fines or consumer restitution. Therefore, if the FTC insists that a company stop making a false claim in an advertisement and the company agrees to stop, it is an example of a consent order.

Question 12

Of the following taglines or slogans,which would most likely trigger an investigation by the Federal Trade Commission or National Advertising Division?

Accepted Answer

The answer of Of the following taglines or slogans,which would...

Question 13

The substantiation test for false and misleading advertising requires:

Accepted Answer

The substantiation test requires competent and reliable evidence to back up any claims made in advertising. Scientific tests and consumer testimonials can be part of this evidence, but they are not the only requirements. The average person's opinion is not a reliable standard for determining whether advertising is false or misleading.

Question 14

Words such as "best," "greatest," and "finest" are examples of:

Accepted Answer

Words such as "best," "greatest," and "finest" are generally considered puffery, which refers to exaggerated or boastful statements about a product or service that are not intended to be taken as literal truth. While puffery is not legally considered deceptive or misleading advertising, it is important for advertisers to avoid making claims that could be realistically interpreted as factual and could potentially mislead consumers.

Question 15

The following are components of the Wheeler-Lea Amendment to the FTC Act:,except:

Accepted Answer

The Wheeler-Lea Amendment did not specifically grant the FTC power to monitor the amount of time television stations advertise to children. However, it did expand the authority of the FTC to prohibit false and misleading advertising practices, gave the FTC power to levy fines when necessary, and granted the FTC access to the courts to enforce the law and ensure compliance with FTC rulings.

Question 16

When McDonald's makes an advertising claim that the company offers the best-tasting hamburgers,the practice is known as:

Accepted Answer

Puffery refers to exaggerated claims about a product or service that are not meant to be taken literally. In this case, McDonald's claim of having the "best-tasting hamburgers" is subjective and not able to be objectively proven, making it an example of puffery.

Question 17

The Federal Trade Commission (FTC)test of substantiation requires:

Accepted Answer

The FTC test of substantiation requires that marketing claims be supported with "data, facts or competent and reliable evidence". This means that companies must have evidence or proof to back up any claims made in their marketing materials.

Question 18

In terms of substantiation of claims in the advertisements,the Federal Trade Commission and courts tend to use each of the following principles,except:

Accepted Answer

The answer of In terms of substantiation of claims in...

Question 19

If at the end of an administrative hearing the judge feels a violation of the law has taken place,the judge will issue a(n):

Accepted Answer

A cease and desist order is often issued by a judge at the end of an administrative hearing if they believe that a violation of the law has occurred. This order requires the party in question to stop engaging in the illegal activity immediately. The other options, such as a consent agreement, corrective advertising directive, and trade regulation ruling, may be issued as well, but they typically are not the first response to a violation of the law.

Question 20

The original role of the Federal Trade Commission (FTC)was to:

Accepted Answer

The FTC was established in 1914 to enforce antitrust laws and prevent unfair methods of competition in order to protect businesses from each other. While the FTC does provide some protection for consumers, its main function is to promote and protect competitive markets. Option A and D are incorrect because while consumer protection is important, it is not the original role of the FTC. Option B is incorrect because the FTC oversees many industries, not just marketing.

Quiz 14: Regulations and Ethical Concerns

Puffery is:

If a consent agreement cannot be reached with a company,the Federal Trade Commission (FTC) would then issue a(n) :

In terms of substantiation,if an advertiser uses expert endorsements,then statements in the advertisement must be based on:

An advertisement or communication is deemed to be deceptive or misleading when:

Companies leaders that are not satisfied with the ruling of the full Federal Trade Commission (FTC) can appeal to the U.S.Court of Appeals.The danger is that companies in appealing to the Court of Appeals is that:

The Federal Trade Commission,National Advertising Division,and the courts would consider the word "better" used in an advertisement to be:

The Wheeler-Lea Amendment to the FTC Act:

An administrative complaint is:

If after an administrative hearing a company is still not satisfied with the ruling of the Federal Trade Commission (FTC) ,the next step is to:

In terms of a judgment by the Federal Trade Commission against a company for false or misleading advertising,which of the following would come first?

When the Federal Trade Commission (FTC) insists that a company stop making a false claim in an advertisement and that company agrees to stop,it is an example of a:

Of the following taglines or slogans,which would most likely trigger an investigation by the Federal Trade Commission or National Advertising Division?

The substantiation test for false and misleading advertising requires:

Words such as "best," "greatest," and "finest" are examples of:

The following are components of the Wheeler-Lea Amendment to the FTC Act:,except:

When McDonald's makes an advertising claim that the company offers the best-tasting hamburgers,the practice is known as:

The Federal Trade Commission (FTC) test of substantiation requires:

In terms of substantiation of claims in the advertisements,the Federal Trade Commission and courts tend to use each of the following principles,except:

If at the end of an administrative hearing the judge feels a violation of the law has taken place,the judge will issue a(n) :

The original role of the Federal Trade Commission (FTC) was to: