Question 1

Which of the following is the largest of the U.S. business-monitoring organizations?

Accepted Answer

The answer of Which of the following is the largest...

Question 2

Good Housekeeping magazine places its "Seal of Approval" on all the products advertised in it. If any of the products are later found to be defective, Good Housekeeping promises to refund the money paid for the products. This kind of careful screening:

Accepted Answer

Good Housekeeping's "Seal of Approval" is a way for the magazine to monitor the products advertised in it, ensuring they meet certain standards of quality. This is not required by the Federal Trade Commission or legislation, and while some print media may use similar screening processes, it is not necessarily common practice. While federal regulatory agencies do monitor products and advertising, the Seal of Approval provides an additional layer of scrutiny and accountability.

Question 3

The Federal Trade Commission has filed a complaint against Provide Commerce, the parent company of Pro-Flowers, for "False and misleading" advertising. Pro-Flowers claims that it ships inventory "directly from the fields." The ads imply that the flowers are not picked until they are ordered. Pro-Flowers actually stores flowers in refrigerated warehouses and ships from these warehouses. The FTC can most likely order Pro-Flowers to run _____ and inform its customers that its flowers do not come fresh from the field.

Accepted Answer

The most appropriate action for the FTC in this case would be to order Pro-Flowers to run corrective advertisements to inform its customers that their flowers are not shipped directly from the fields as advertised. A corrective advertisement would help to correct the misleading message that has been conveyed to customers through the false advertising. A cease-desist order prohibits a company from engaging in a specific activity, while a consent order is a legally binding settlement agreement between the FTC and the company. A cessation order would force the company to stop operating altogether, which is not a suitable penalty in this case. The FTC may also require Pro-Flowers to run substantiated advertisements in the future, but that would not be the immediate course of action.

Question 4

An ad in Self magazine states, "Listerine mouthwash reduces germs on up to 96.7% of tissue surfaces 15 minutes after a Listerine gargle." Which federal agency would have the authority to determine if this claim was correct?

Accepted Answer

The Food and Drug Administration (FDA) has the authority to regulate and approve claims made by companies regarding the safety and effectiveness of their products, including oral care products such as mouthwash. The FDA is responsible for ensuring that all claims made in product labeling and advertising are truthful and not misleading. Therefore, if Listerine mouthwash claims to reduce germs on tissue surfaces by 96.7%, the FDA would have to review and approve the claim to ensure that it is accurate and supported by scientific evidence before it can be advertised to consumers.

Question 5

Adolph Coors Co. ran an ad which featured a purported taste test between Coors's Aspen Edge and Anheuser-Busch's Michelob Ultra. A taste-tester downed a glass of Aspen Edge and took only a sip of Michelob Ultra. A print version of the ad said, "Beer drinkers agree that Aspen Edge has more taste than Michelob Ultra." Coors was forced to remove the television advertisements after Anheuser-Busch said it made unsubstantiated claims about consumer preferences. Anheuser-Busch most likely:

Accepted Answer

Anheuser-Busch most likely wanted research data that supported Coors's claim that Aspen Edge had more taste than Michelob Ultra. This would be the basis for their assertion that Coors made unsubstantiated claims about consumer preferences.

Question 6

Which of the following statements about the Food and Drug Administration (FDA) is most likely true?

Accepted Answer

The FDA has authority over the labeling of cosmetics, drugs, and vitamin supplements. B is incorrect as the FDA does not monitor copyrighted material. C is incorrect as the FDA does require health food manufacturers to list product ingredients on labels. D is incorrect as the FDA does have control over promotional statements on package labels. E is incorrect as the FDA is not a branch of the FTC.

Question 7

When Grace looked at the container of Round-Up weed and grass killer, she saw a notice that read, "Avoid contact with eyes. This product can cause eye irritation." Which term best describes this label information?

Accepted Answer

The label information on the Round-Up weed and grass killer container is an example of affirmative disclosure, which is a legal requirement for companies to disclose any potential negative effects or hazards associated with their products. The notice is not a package requirement, customer testimonial, nutritional claim, or consent decree.

Question 8

Two companies, Le Shuttle and P&O European Ferries, provide Europeans with the ability to cross the English Channel. An advertisement for Le Shuttle claimed it was more popular with travelers than P&O European Ferries. P&O European Ferries lodged an objection with a European regulatory agency and pointed out that they had carried 1. 4 million cars in the previous year compared to only 1 million on Le Shuttle. P&O European Ferries most likely wanted Le Shuttle to run _____ advertising.

Accepted Answer

P&O European Ferries likely wanted Le Shuttle to run corrective advertising to address the misleading claim about popularity.

Question 9

Consumer advocate groups are most likely to:

Accepted Answer

Consumer advocate groups are primarily focused on protecting consumer rights and interests. One way they do this is by submitting complaints about ads that may be misleading, untrue, or promoting harmful products to the appropriate government agencies. This helps ensure that advertisers are held accountable for their messaging and helps protect consumers from deceptive advertising practices.

Question 10

Which of the following statements is true about cease-and-desist orders?

Accepted Answer

Cease-and-desist orders prohibit further use of the offending advertisement. They are legal orders issued by the FTC and have legal ramifications if violated. Options A, B, D, and E are incorrect as they do not accurately describe cease-and-desist orders.

Question 11

A(n) _____ is a document that an advertiser accused of deceptive or unfair advertising signs in which it agrees to stop the objectionable advertising.

Accepted Answer

A consent decree is a legal agreement between the advertiser and the regulatory agency (such as the Federal Trade Commission) in which the advertiser agrees to stop the objectionable advertising without admitting guilt or liability.

Question 12

A trademark:

Accepted Answer

A trademark is a word, name, symbol, or device that is used to identify and distinguish the goods of one seller or provider from those of others. It is a form of intellectual property that is legally protected and can include phrases, logos, and even sounds. The purpose of a trademark is to help consumers easily identify and differentiate between products from different sources.

Question 13

Much of the state legislation that deals with advertising is based on the:

Accepted Answer

The "truth-in-advertising" model was first developed by Printer's Ink in the early 1900s and has since become the basis for much of the state and federal legislation related to advertising.

Question 14

Which federal agency would have the authority to deal with the fact that a brand of hotdog marked "Low Fat" contains only ten percent less fat than regular hotdogs?

Accepted Answer

The Food and Drug Administration (FDA) has the authority to regulate and monitor labeling and advertising of food products, including claims such as "Low Fat." The FDA has specific guidelines for such claims, and if the product does not meet those guidelines, the agency can take action against the manufacturer.

Question 15

Which of the following can most likely be copyrighted?

Accepted Answer

A novel written by an author like Stephen King is an original work of authorship fixed in a tangible medium of expression, making it eligible for copyright protection.

Question 16

The National Advertising Division (NAD) of the Advertising Self-Regulatory Council (ASRC):

Accepted Answer

The National Advertising Division (NAD) of the Advertising Self-Regulatory Council (ASRC) monitors advertising practices and reviews complaints about advertising from consumers. It is responsible for ensuring that advertising is truthful, accurate, and substantiated. It also makes recommendations for changes to advertising that is found to be in violation of the guidelines set forth by industry organizations and regulatory agencies.

Question 17

Through the issuance of _____, the government provides incentives to invent, invest in, and disclose new technology worldwide.

Accepted Answer

Patents are the legal instruments issued by governments to inventors, giving them exclusive rights to prevent others from making, using, or selling their invention for a certain period of time. By providing inventors with this exclusive right, the government incentivizes them to invest in new technology and disclose it to the public in exchange for the chance to profit from it. This, in turn, promotes innovation, economic growth, and technological progress. Trademarks and copyrights are different forms of intellectual property protection that do not provide the same incentives for inventors. Venture capital and differential advantages also do not directly relate to government incentives for technology innovation.

Question 18

The primary purpose of the Advertising Self-Regulatory Council is to:

Accepted Answer

The Advertising Self-Regulatory Council's primary purpose is to promote and enforce standards of truth, accuracy, taste, morality, and social responsibility, as stated in the first option. The other options are not consistent with the council's objectives.

Question 19

When the Federal Trade Commission determines that an ad is deceptive or unfair, it can:

Accepted Answer

The FTC can convince the advertiser to sign a consent decree, which is an agreement to stop the deceptive practice without admitting guilt.

Question 20

The _____ has indirect control over advertising through its authority to license or revoke the license of all broadcasting stations.

Accepted Answer

The Federal Communications Commission (FCC) has the authority to license or revoke the license of all broadcasting stations, which indirectly controls advertising on those stations. The other options listed do not have this authority. The Federal Trade Commission regulates advertising for deceptive or unfair practices, the Better Business Bureau is a non-profit organization that provides accreditation and handles consumer complaints, the Advertising Self-Regulatory Council is a self-regulatory body for the advertising industry, and the Office of Consumer Affairs handles consumer complaints and provides information to consumers.

Quiz 2: The Environment of Advertising