Integrated Advertising, Promotion, and Marketing Communications, 7e (Clow)
Chapter 14 Regulations and Ethical Concerns
1) The agency that would be concerned with the salt content in foods would be the:
A) Federal Trade Commission.
B) Federal Communications Commission.
C) United States Postal Service.
D) Food and Drug Administration.
Question Tag: Application
AACSB Category: Application of knowledge
Objective: 14-1
2) The agency that monitors advertising on food packages and advertisements for medicines is
the:
A) Federal Trade Commission.
B) Federal Communications Commission.
C) United States Postal Service.
D) Food and Drug Administration.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
3) If a customer is concerned about the labeling on a bag of potato chips, the regulatory agency
to contact is the:
A) Federal Communications Commission.
B) Food and Drug Administration.
C) Federal Trade Commission.
D) United States Postal Service.
Question Tag: Critical Thinking
AACSB Category: Ethical understanding and reasoning
Objective: 14-1
1
4) Public complaints about the amount of violence on television would be sent to the:
A) FCC.
B) FDA.
C) FTC.
D) BATF.
Question Tag: Critical Thinking
AACSB Category: Ethical understanding and reasoning
Objective: 14-1
5) The law states that advertising to children cannot exceed 12 minutes per hour during
weekdays. Which organization is responsible for making sure this time limit is not exceeded?
A) Federal Communications Commission
B) Federal Trade Commission
C) Food and Drug Administration
D) United States Postal Service
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
6) The Food and Drug Administration regulates and oversees:
A) marketing materials sent through the mail.
B) packaging and labeling of products, advertising on food products, and advertising of drugs.
C) television, radio, and the telephone industries.
D) the amount of time that television stations are permitted to advertise to children.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
7) The agency with the greatest degree of jurisdiction over marketing and advertising is the:
A) FTC.
B) FCC.
C) USPS.
D) FDA.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
2
8) The original role of the FTC was to:
A) provide protection for consumers from big businesses.
B) oversee the marketing industry.
C) enforce antitrust laws and protect businesses from one another.
D) regulate advertising and marketing communications.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
9) The Wheeler-Lea Amendment to the FTC Act:
A) regulates excessive advertising to children.
B) prohibits deceptive and misleading advertising.
C) prohibits puffery and comparative advertising.
D) sets the substantiation requirements that an ad must meet when claims are made about a
product.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-1
10) All of the following are components of the Wheeler-Lea Amendment to the FTC Act except:
A) expanded authority of the FTC to prohibit false and misleading advertising practices.
B) granted the FTC power to monitor the amount of time television stations advertise to children.
C) gave the FTC power to levy fines when necessary.
D) granted the FTC access to the courts to enforce the law and ensure compliance with FTC
rulings.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-1
11) An advertisement or communication is deemed to be deceptive or misleading when:
A) the misrepresentation induces anyone or someone to make a purchase.
B) a substantial number of people make a purchase or are influenced by the advertisement.
C) a substantial number of people or the “typical person” is left with a false impression or
misrepresentation that relates to the product.
D) a competing firm makes the same claim.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-1
3
12) Reebok and Skechers were both forced to pay fines for misleading advertising about shoe
products.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
13) The Food and Drug Administration regulates and oversees the packaging and labeling of
products. It also monitors advertising on food packages and advertisements for drugs.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
14) The Federal Trade Commission monitors advertising on food packages and advertisements
for drugs.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
15) The Federal Communications Commission) is responsible for monitoring television
advertising directed to children, in terms of the number of minutes per hour that are directed to
children.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
16) The Federal Communications Commission holds jurisdiction over the content of
advertisements transmitted by mass media.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
17) The FCC places limits on advertising to children on weekends, but not on weekdays.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
4
18) A person targeted by a mail fraud campaign should contact the Federal Communications
Commission.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 14-1
19) The federal agency that presides over marketing communications is the Federal
Communications Commission.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
20) When the FTC Act was passed in 1914, the Federal Trade Commission’s responsibility was
to enforce antitrust laws and to protect businesses from one another.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
21) The Wheeler-Lea Amendment (1938) of the Federal Trade Commission Act prohibits false
and misleading advertisements.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
22) When a substantial number of people are misled by a series of commercials or an
advertisement, it is deemed to be deceptive or misleading.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 14-1
5
23) A “typical person” must believe the content of an advertisement to be false in order for the
Wheeler–Lea Amendment to apply.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 14-1
24) Identify the five major federal government agencies that deal with some aspect of marketing
as its primary responsibility.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-1
25) What criteria must be met to deem an advertisement deceptive or misleading?
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-1
26) Puffery is:
A) a deliberate attempt to mislead and deceive.
B) any illegal marketing activity.
C) increased product prices to cover advertising costs.
D) an exaggerated claim with no overt attempt to mislead or deceive.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-2
6
27) Words such as “best,” “greatest,” and “finest” used in advertising are examples of:
A) deceptive advertising.
B) misleading advertising.
C) standard industry practices.
D) puffery.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-2
28) If Wendy’s makes an advertising claim that the company offers great-tasting hamburgers, the
practice is:
A) a violation of the company’s code of ethics.
B) misleading and deceptive advertising.
C) puffery.
D) cross-promotion claim.
Question Tag: Application
AACSB Category: Application of knowledge
Objective: 14-2
29) The Federal Trade Commission, National Advertising Division, and the courts would
consider the word “better” used in an advertisement to be:
A) deceptive and misleading advertising.
B) puffery.
C) puffery, but it also implies a comparison, which, if challenged, may require substantiation.
D) a violation of the Federal Trade Commission Act.
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 14-2
30) Of the following taglines or slogans, which would most likely trigger an investigation by the
Federal Trade Commission or National Advertising Division of the CBBB?
A) For the finest Asian food come to China Garden
B) Eat at Wendy’s, the best hamburgers in town
C) Tree Top apple juice is twice as good
D) For better looking skin, use Avon
Question Tag: Critical Thinking
AACSB Category: Reflective thinking
Objective: 14-2
7
31) The substantiation test for false and misleading advertising requires:
A) scientific tests.
B) consumer testimonials.
C) competent and reliable evidence.
D) the average person to be convinced it is not false and misleading.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-2
32) The FTC test of substantiation requires:
A) a comparison of marketing claims made by competing firms.
B) the use of a code of ethics.
C) data, facts, or competent and reliable evidence.
D) testimony from an expert in the field.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-2
33) If an advertiser uses expert endorsements, statements made by the expert in the
advertisement must be based on:
A) legitimate tests performed by experts in the field.
B) the opinion of “typical persons” who would use the product.
C) truthful statements that represent the expert’s personal experience.
D) lab or engineering tests.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-2
8
34) To substantiate an advertisement, the Federal Trade Commission and courts tend to use each
of the following principles except:
A) the federal government assumes consumers read ads “broadly” and do not notice details
hidden in fine print.
B) tests have to be with the actual product or one that is considered similar.
C) evidence should come from individuals or companies that would be considered experts by
others in the field.
D) the courts and FTC will consider the totality of evidence concerning a claim, not just one
particular study that may support a claim.
Question Tag: Definition (Concept)
AACSB Category: Ethical understanding and reasoning
Objective: 14-2
35) The Wheeler-Lea Amendment makes advertising using puffery illegal.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-2
36) A claim is when a firm makes an exaggerated statement about a good or service, while
puffery is when a firm makes a factual statement about a good or service.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 14-2
37) The key difference, in terms of the FTC and the courts, between puffery and a claim is that
puffery is not considered to be a factual statement while a claim is considered to be a factual
statement that can be proven true or false.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 14-2
38) Terms normally associated with puffery include “best,” “greatest,” and “finest.”
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-2
9
39) Although the word “better” is normally accepted as puffery, the word “best” is somewhat
vague and implies a comparison, which has recently been tested through the FTC.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-2
40) When a statement is made that is deemed to be puffery, the concept of substantiation applies.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-2
41) Substantiation means that an advertising claim or promise must be proven with data, facts, or
through competent and reliable evidence.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-2
42) If a company uses endorsers, the statements made by the endorsers must be truthful but can
represent the experiences of typical people rather than the endorsers.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 14-2
43) To substantiate an advertising claim, the statement must reflect the typical experience that a
customer would expect to encounter from using a good or service, unless the advertisement
clearly and prominently states otherwise.
Question Tag: Definition (Concept)
AACSB Category: Reflective thinking
Objective: 14-2
44) In terms of substantiation of advertising claims, the FTC and the courts assume that
consumers can and will read fine print or qualifying language that is placed in an advertisement.
Question Tag: Definition (Concept)
AACSB Category: Application of knowledge
Objective: 14-2
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