68) Which statement regarding cease-and-desist orders issued by the FTC is FALSE?
A) A cease-and-desist order requires that the deceptive or unfair practice by a business be
stopped.
B) An advertiser accused of deceptive advertising is entitled to legal representation in front of
the presiding judge.
C) An advertiser can appeal the order to a full five-member commission.
D) A cease-and-desist order is the first step in the regulation process after the FTC determines
that an ad is deceptive.
E) The process leading to the issuance of a cease-and-desist order is similar to a court trial.
69) Which of the following is the landmark corrective advertising case?
A) Valentine v. Chrestensen
B) Warner-Lambert v. FTC
C) 44 Liquormart, Inc. v FTC
D) Nike v. FTC
E) Cincinnati v. Discovery Network
70) Which type of self-regulation occurs when an advertising agency develops, uses, and
enforces norms within its own practices?
A) industry self-regulation
B) self-discipline
C) social ethics
D) corporate social responsibility
E) personal ethics
71) General Foods and Colgate-Palmolive have their own codes of behavior and criteria to
determine whether their ads are acceptable. Which type of self-regulation does this demonstrate?
A) industry self-regulation
B) self-discipline
C) self-regulation by public groups
D) personal ethics
E) social ethics
72) When an industry develops, uses, and enforces norms, this is known as which type of self-
regulation?
A) industry self-regulation
B) self-discipline
C) social ethics
D) professional ethics
E) personal ethics
73) In 1971, what organization did several professional advertising associations, in conjunction
with the Council of Better Business Bureaus, establish to negotiate voluntary withdrawal of
national advertising that professionals consider deceptive?
A) Public Citizen
B) American Legacy Foundation
C) American Association of Advertising Agencies
D) Advertising Self-Regulatory Council
E) American Advertising Federation
74) The two operating arms of the Advertising Self-Regulatory Council are the ________.
A) NAD and the NARB
B) NAD and the AAAA
C) AAF and the AAAA
D) FTC and the FCC
E) FTC and the NAD
75) Which arm of the Advertising Self-Regulatory Council is made up of people from the field
of advertising who evaluate complaints submitted by consumers, consumer groups, industrial
organizations, and advertising firms?
A) National Advertising Division (NAD)
B) National Advertising Review Board (NARB)
C) American Association of Advertising Agencies (AAAA)
D) Federal Trade Commission (FTC)
E) American Advertising Federation (AAF)
76) If the National Advertising Division (NAD) and an allegedly deceptive advertiser cannot
reach a satisfactory resolution, the case is referred to the ________.
A) National Advertising Review Board (NARB)
B) American Association of Advertising Agencies (AAAA)
C) Federal Trade Commission (FTC)
D) American Advertising Federation (AAF)
E) Federal Communications Commission (FCC)
77) If the National Advertising Review Board (NARB) and an allegedly deceptive advertiser
cannot reach a satisfactory resolution, the case is most likely referred to the ________.
A) National Advertising Division (NAD)
B) American Association of Advertising Agencies (AAAA)
C) Advertising Review Council (ARC)
D) American Advertising Federation (AAF)
E) Federal Trade Commission (FTC)
78) Public Citizen and the Cultural Environment Movement are both examples of ________.
A) consumer activist groups
B) industry groups
C) government agencies
D) federal regulators
E) professional oversight groups
79) Which of the following requires that an advertisement be discontinued within 30 days?
A) a claim substantiation
B) a finding of material injury
C) a consent decree
D) an order for corrective advertising
E) a cease-and-desist order
80) Which of the following is the best example of the type of advertising self-regulation referred
to as self-discipline?
A) AT&T adopting a code of marketing ethics
B) an individual making choices based on her moral guidelines
C) the Distilled Spirits Council’s Code of Responsible Practices designed for producers and
marketers of distilled spirits
D) a company making special efforts to hire a multicultural staff
E) Duracell consenting to add a disclaimer to one of its ads
81) In 2007, syndicated radio host Don Imus made sexist and racist comments about players on
the Rutgers women’s basketball team during his radio show. Radio stations that aired the
program would most likely have been concerned about regulatory action from which of the
following as a result of the comments that were broadcast?
A) FTC
B) FCC
C) Better Business Bureau
D) FDA
E) U.S. Patent and Trademark Office
82) Nike’s longtime symbol on its products and ads is the Nike “Swoosh,” which looks like a
curved checkmark. If another athletic shoemaker used that symbol on its products or in its ads,
that company would most likely be guilty of ________.
A) comparative advertising
B) competitive infringement
C) misleading advertising
D) trademark infringement
E) deceptive advertising
83) Lovely Locks, a maker of shampoos, wants to enter the cosmetics market with a line of
mascara and eyeliner. However, Lovely Locks must first obtain approval from the ________.
A) U.S. Patent and Trademark Office
B) Interstate Commerce Commission
C) Food and Drug Administration
D) Federal Trade Commission
E) Federal Communications Commission
84) The Federal Trade Commission investigated a claim made in an ad for Ultra Slimfast and
determined that the ad was deceptive. What’s the first remedy that will be taken by the FTC?
A) issue a cease-and-desist order
B) fine the advertiser $10,000 for every day the ad was run
C) require the advertiser to run corrective advertising
D) order the advertiser to refund consumers’ money
E) issue a consent decree
85) A new weight loss program called Keep It Off advertises that dieters who have used the
program have maintained their weight loss for more than three years. However, Keep It Off does
not have any record of independent research that shows these results. The company may
encounter problems with the FTC because it ________.
A) cannot provide claim substantiation
B) did not sign a mandated consent decree
C) has not allowed for consumer redress
D) has run corrective advertising
E) has used misleading endorsements
86) A federal agency ordered KFC to stop running ads with false claims that its fried chicken is
compatible with certain weight loss programs. Which agency had the authority to issue this
order?
A) Federal Trade Commission
B) Food and Drug Administration
C) Consumer Product Safety Commission
D) U.S. Patent and Trademark Office
E) American Association of Advertising Agencies
87) When Kraft foods made a claim that their processed cheese slices contained as much calcium
as five ounces of milk, the Federal Trade Commission investigated it as a deceptive claim.
Although Kraft admitted that a cheese slice did not actually contain as much calcium as claimed
due to processing, the company argued that its ad was not deceptive because consumer research
indicated that calcium content was not important to consumers when deciding among brands of
cheese. Basically, Kraft’s defense was based on its belief that the misleading claim ________.
A) did not lead to material injury to consumers, and thus it was not deceptive
B) did not claim anything different from other cheese manufacturers
C) was not technically misleading if consumers didn’t think it was
D) was not reasonable from the consumers’ point of view
E) did not omit any important information
26
Copyright © 2019 Pearson Education, Inc.
Use the passage below to answer the following questions.
Prior to 1997, broadcast ads for prescription drugs could not mention both the ailment for which
the drug received FDA approval and the name of the drug in the same advertisement. That is,
only one or the other could be mentioned, which led to much confusion on the part of consumers.
In 1997, the FDA loosened its controls on pharmaceutical companies, and as a result, the amount
of prescription drug advertising on television skyrocketed. Now, both the ailment and the name
of the drug can be mentioned, but major side effects must also be mentioned and there must be
an indication where the consumer can get more information, such as from a magazine ad or a
website. Some have been quite critical of this direct-to-consumer prescription advertising,
claiming it has led to an increase in requests for costlier drugs when the less expensive generic
drugs would be just as effective.
88) One ad for a drug used to overcome male erectile dysfunction depicted an old man in a
nursing home acting like a young man chasing after several women at once. The ad was not
allowed to air on the major television networks of NBC, CBS, and ABC. The ad did not contain
any deceptive or unsubstantiated claims, so there was nothing untruthful in the ad. Furthermore,
the ad followed the guidelines given by the FDA regarding broadcast advertising by indicating
the major side effects and referring to a magazine ad for more information. Which of the
following best explains why the ad was not allowed to air?
A) Stereotypes of “dirty old men” are not allowed in any advertising.
B) The National Advertising Division determined the ad was distasteful and disallowed it from
being aired on television.
C) Not all advertising is given the same protection under the First Amendment of the
Constitution.
D) The media can reject ads that violate their standards of good taste.
E) The behavior portrayed by the old man did not reflect the real behavior of the individual
involved.
89) Pfizer is a large pharmaceutical company that has dramatically increased its direct-to–
consumer television advertising of prescription drugs. However, Pfizer has stringent in-house ad
review procedures, including reviews by agency and client attorneys. Pfizer is concerned that
any claim made in an ad is verifiable and that the ad is executed in good taste. What type of
advertising self-regulation does this illustrate?
A) industry self-regulation
B) self-discipline
C) self-regulation by community groups
D) mandatory self-regulation
E) voluntary self-regulation
90) An advertisement by the manufacturer of Flonase, a prescription allergy nasal spray,
compared its product with another nasal spray on the market, Nasonex, and claimed that it
controlled allergy symptoms for a longer period. The ad was effective, resulting in a two percent
increase in market share for Flonase. Manufacturers of Nasonex claimed that the advertisement
misrepresented their product and basically made a false comparison. Nasonex would have to
prove all of the following EXCEPT which one to support its claim?
A) False statements had been made about Nasonex or Flonase.
B) The ads actually deceived a substantial segment of the audience.
C) Both Nasonex and Flonase are sold in interstate commerce.
D) Nasonex has been injured or is likely to be injured as a result of the false statements.
E) Flonase relied on puffery in the ads.
91) Critics of advertising tend to argue that advertising has the power to shape social trends and
the way people think and act.
92) An advertisement that is considered offensive in one context is considered offensive in all
contexts.
93) In comparison to the United States, Canada and Australia have stronger restrictions against
tobacco advertising.
94) People who accuse advertisements of causing demand creation believe that advertisements
cause people to buy things they do not need and cannot afford.
95) The Children’s Food and Beverage Advertising Initiative is a federal law regulating the
marketing of so-called “junk food” to children.
96) An understanding of local culture and customs is important in international advertising.
97) According to federal regulations, a spokesperson who endorses a brand must use the brand.
98) Because standards of good taste are generally consistent across a culture, creating general
guidelines for good taste in advertising is straightforward.
99) A cereal maker that advertises its product as “the one that will make you smile” is using an
exaggerated claim, not puffery.
100) A code of ethics identifies how a professional in the industry must respond when faced with
ethical questions.
101) One potential benefit to shockvertising is that the controversy attracts attention and buzz.
102) In advertising, an action that is legal is by definition ethical.
106) Under the First Amendment to the U.S. Constitution, protection of commercial speech is
absolute.
107) The government can ban truthful commercial speech if it can be proven that the public good
demands such restrictions.
108) The Federal Trade Commission (FTC) is the primary agency governing the advertising
industry.
109) The corrective advertising required by the Warner-Lambert v. FTC case shows how
corrective advertising can change consumers’ impressions created by deceptive advertising.
110) With respect to prescription drugs, the Food and Drug Administration’s primary job is to
determine whether the drugs are marketed in a responsible way.
111) The Federal Communications Commission (FCC) has the power to ban the airing of
messages, including ads, that are deceptive or in poor taste.
112) The Federal Communications Commission (FCC) has the authority to take legal actions
against advertisers and advertising agencies.
113) To be considered deceptive under FTC policy, a false or misleading advertisement must
influence consumers’ decision making about the product or service advertised.
114) The current FTC policy on deception is clear and easy for advertisers to measure.
115) An advertiser should have data on file to substantiate any claims it makes in its
advertisements.
116) Advertisers are legally required to comply with a consent decree and stop a deceptive
practice.
117) The first step in the regulation process after the FTC determines that an ad is deceptive is
the issuance of a cease-and-desist order.
118) The process leading to the issuance of a cease-and-desist order is similar to that of a court
trial.
119) An advertising agency can be held liable along with the advertiser for deceptive advertising.
120) The media can reject ads that violate their standards of truth and good taste.
121) Virtually all major advertisers and advertising agencies have in-house ad review
procedures, typically including reviews by agency and client attorneys.
122) The National Advertising Division (NAD) and the National Advertising Review Board
(NARB) are government agencies that negotiate the voluntary withdrawal of national advertising
that professionals consider deceptive.
123) The Better Business Bureau is a government agency with the power to oversee advertising,
particularly local advertising.
124) A radio host who makes gender stereotyped references that are in poor taste could face
action from the FTC.
125) The concern that children may be exploited by certain advertising messages could be
addressed by both the FTC and the FCC.
126) Discuss the key ethical issues of taste, stereotyping, use of sex appeal, and targeting
children. How do advertising professionals deal with these issues?
127) Bob, a brand manager for a national brand laundry detergent, noticed a claim made in a
competitor’s advertisement that falsely indicates that its brand performed better than his
company’s brand. What must Bob’s company prove to win a false advertising lawsuit over this
comparative claim?
128) Kim and her boyfriend were watching a movie on television when a commercial for a
laxative came on. Kim was interested in this product, but she was embarrassed that her boyfriend
was there when this ad came on. She quickly changed the channel. What key ethical issue
challenging the standards of advertising professionals does this best illustrate?
129) What are the arguments against using sex appeals in an advertisement for a product that is
NOT related to sex?
130) OfficeMax has an advertisement that shows an African American with a bushy 1970s-era
natural, or “Afro,” hairstyle dancing among office cubicles as he dispenses office supplies to
fellow employees. The music he is dancing to is a famous song, “Rubberband Man,” recorded by
an African-American singer. While OfficeMax claims this ad has been received favorably by
consumers, the response could have gone the other way. Explain why.
131) Why is it important for marketers to avoid the use of race-related stereotypes in
advertisements?
132) Many advertisements for weight-loss products feature before-and-after photos of
individuals who have lost an astonishing amount of weight. While these products may work for
some people, the results shown in the ads may not be typical. What are regulators’ concerns
regarding these ads, and how do advertisers of these products get away with showing such
demonstrations?
133) In 1997, the Food and Drug Administration loosened its controls on pharmaceutical
companies, and as a result, the amount of prescription drug advertising has skyrocketed. What is
an advantage of this regulatory change?
134) How is the Distilled Spirits Council a model for industry self-regulation?
135) In 1997, the Food and Drug Administration loosened its controls on pharmaceutical
companies, and as a result, the amount of prescription drug advertising has skyrocketed. What is
a disadvantage of this regulatory change?
136) Advertising has been criticized because it is used to drive people to feel a need or want.
What is this called and why is advertising criticized?
137) Explain the distinctions between ethics and morals.
138) What is the purpose of the Institute for Advertising Ethics’ Principles and Practices for
Advertising Ethics?
139) List three ethical questions advertising professionals can ask themselves when confronted
with ethical dilemmas concerning whether shockvertising “crosses a line.”
140) Differentiate between a trademark and a copyright. Explain the importance of each and how
each is protected.
141) Describe three specific responsibilities of the Federal Trade Commission.
142) Name and describe four FTC remedies for deception and unfair advertising.
143) Explain the “reasonableness” element of the current FTC policy on deception.
144) Explain the “injurious” element of the current FTC policy on deception.
145) P&G is concerned about a claim made in a rival’s advertisement. P&G thinks that the
competition’s claim is deceptive. If P&G does not want to get the government involved in this
dispute, what course of action can P&G take to resolve this issue?
146) Todd just took a job as the manager of a television station. What does he need to know
about the station’s responsibility for showing children’s educational shows?
147) You, as a consumer, think that an advertisement you saw on television for a national brand
is making a false claim. What can you do about it?
39
Copyright © 2019 Pearson Education, Inc.
Use the information below to answer the following questions.
Amy is seven years old and loves to play with dolls. In fact, she has more than 20 Barbie dolls
and lots of clothes and accessories, including three cars, a house with furniture, and an airplane.
Mattel, the manufacturer of Barbie, also sells many other products with the Barbie brand, such as
games, notebooks, and girls’ clothing, to name a few.
148) One ad for Barbie shows an animated Barbie character diving from a diving board doing
flips and twists before landing in a pool. The commercial was advertising a Barbie doll with a
diving board that can be attached to the side of a bathtub. Amy begged her mother for the doll
and got it, but she was very disappointed when the doll did not perform as she had seen it
perform in the commercial. She realized she had to hold on to the doll to make it flip around and
dive into the water. What was wrong with this ad?
149) What self-regulatory agencies would likely investigate advertisements for Barbie?
150) Amy’s mother limits Amy’s television viewing time because she feels there is just too much
advertising influencing her child to want more stuff. However, there are restrictions regarding
advertising toward children. Briefly name and describe the laws and regulations specific to
television advertising targeted at children.