93) Which of the following statements about misrepresentation is false?
A) When salespeople loosely describe their goods or services in glowing terms, those statements
cannot be relied upon by the potential buyer.
B) Courts tend to favor salespersons in misrepresentation cases when the customer lacks product
knowledge.
C) When a salesperson makes claims of a “factual nature” regarding a service’s inherent
capabilities, the law treats these comments as statements of fact and warranties.
D) A salesperson’s opinion of the quality of the product being sold is known as sales puffery and
is not legally actionable.
E) To “stay legal” a salesperson needs to understand the difference between general statements
of praise and statements of fact.
94) All of the following statements, if made by a salesperson, could have legally actionable
consequences if the statement were incorrect EXCEPT:
A) “this refrigerator will preserve foods in the warmest weather.”
B) “this is a safe, dependable helicopter.”
C) “feel free to prescribe this drug to your patients, doctor. It’s not addictive.”
D) “this mace pen is capable of instantaneous incapacitation for a period of 15 to 20 minutes.”
E) “this offer is valid only until the end of this month.”
95) A salesperson can minimize exposure to costly misrepresentation and breach of warranty
lawsuits if he/she:
A) never negotiates.
B) avoids win-win sales situations.
C) never sells the customer more than he/she wants.
D) thoroughly educates customers before making a sale.
E) offers opinions when the customer asks what result a product will accomplish.
96) Which of the following statements, if false, would most likely have legal consequences?
A) “You’re going to love this new mattress!”
B) “We are the metropolitan area’s low price leader.”
C) “We offer a 100 percent order-fill rate; you’ll never experience a back-order.”
D) “Our employees have extensive training in how to pamper our customers.”
E) “Your own mother can’t care for you as well as our staff!”
97) Edna Wallace is a little worried concerning all the talk she has heard recently about lawsuits
due to misrepresentation and breach of warranty. To help her “stay legal,” her sales manager
should advise her to do all of the following EXCEPT:
A) be accurate when describing her product’s capabilities.
B) thoroughly educate all customers before making a sale.
C) avoid making exaggerated claims about product safety.
D) know the technical specifications of the products she sells.
E) make claims or promises of a factual nature.
98) Which term refers to giving some customers promotional allowances and support while not
making other customers aware of such opportunities?
A) customer discrimination
B) selective discounting
C) price discrimination
D) exclusive dealing
E) functional discounting
99) Sheridan decides to buy his first car. The car salesperson promises to arrange a car loan for
him if he also purchases the auto insurance. This is a classic example of:
A) misrepresentation.
B) reciprocal selling.
C) a Green River dealership.
D) discriminatory selling.
E) a tie-in sale.
100) Which of the following marketing tactics would most likely trigger an ethical dilemma?
A) Prospecting
B) Reciprocity
C) Cooperative acceptance
D) Seasonal discounts
E) Loyalty programs
101) If a video game manufacturer required its resellers to stock a line of games based on the
financially-disappointing movie War of the Worlds in order to carry games based on the very
popular TV show Survivor, it would be an example of:
A) misrepresentation.
B) a tie-in sale.
C) reciprocal selling.
D) a Green River dealership.
E) discriminatory selling.
102) “I’ll let you sell the Harley-Davidson designer clothes only if you’ll also sell a new line of
clothes designed by Paula Abdul, too.” This statement made by a salesperson to a specialty
retailer is potentially an example of ________ and may be in violation of the Clayton Act
prohibition if the action substantially lessens competition.
A) misrepresentation
B) tie-in sales
C) reciprocity
D) price discrimination
E) kickbacks
103) The Clayton Act prohibits tie-in sales and exclusive agreements if they ________.
A) promote sexual harassment.
B) allow some customers to receive price reductions while others do not.
C) encourage price discrimination.
D) substantially lessen competition.
E) removes the employer’s ability to terminate-at-will without justification.
104) If a manufacturer requires that its wholesalers and retailers buy merchandise only from it,
the contract is a(n) ________ contract.
A) exclusive dealership
B) reciprocity
C) product discrimination
D) deceptive slotting
E) price discrimination
105) “I’ll tell you what,” said Tim. “I’ll buy all my building supplies from your company if you’ll
make sure your people rent generators from my firm.” Tim is proposing:
A) receivership.
B) reciprocity.
C) a tie-in sale.
D) price bartering.
E) discriminatory selling.
106) NewShine Floor Co. manufactures floor mats. It has agreed to buy all of its light bulbs and
fixtures from Luminous Lighting if Luminous will agree to buy and use NewShine safety mats in
its factory. This is an example of:
A) reciprocity.
B) tie-in sales.
C) price discrimination.
D) a Green River dealership.
E) an exclusive kickback.
107) What is reciprocity?
A) Obeying the Core Principles of Professional Selling
B) Buying a product from someone if that person agrees to buy from you
C) Sharing competitive intelligence
D) Creating win-win buying situations
E) A mutually-beneficial buying situation that does not lessen competition
108) Cooling-off laws apply only to:
A) sales made in out-of-town offices, regardless of value.
B) sales for which verbal guarantees are given.
C) sales over $25, made door-to-door.
D) sales over $50, made in hometown offices.
E) sales made in hometown offices over the value of $100.
109) A cooling-off law:
A) gives the buyer three weeks to return merchandise.
B) covers items sold through wholesale outlets.
C) deals with purchases between $25.00 and $50.00.
D) is in effect in all states.
E) covers some door-to-door transactions.
110) A Green River ordinance states that:
A) door-to-door sales are illegal unless being made for nonprofit organizations like schools and
Girl Scouts.
B) door-to-door salespersons who are not residents of the city in which they do business must
purchase sales licenses.
C) all persons selling directly to consumers must pay a bond.
D) door-to-door sales are not allowed within city limits.
E) all salespeople in a city must obtain a sales license.
111) What is the primary purpose of Green River ordinances and cooling-off laws?
A) Hold salespeople legally responsible for damaged products
B) Allow small businesses to compete fairly against large firms
C) Require persons selling directly to consumers to pay a license fee
D) Enforce federal laws regarding competition and monopolies
E) Protect consumers from high-pressure, unethical sales tactics
112) According to surveys, which of the following statements about how managers view sales
ethics is true?
A) Sales goals force managers to act even more ethically than they ordinarily would
B) Some sales managers lower their ethical standards to meet job goals
C) Few managers feel that they face ethical problems in the workplace
D) Most managers are unaware of any unethical behavior in their industry
E) Most managers feel that they and their employees are operating as ethically as possible
113) A(n) ________ is a formal statement of a company’s values concerning ethics and social
issues.
A) social covenant
B) tying agreement
C) law of fairness
D) code of ethics
E) ethics ombudsperson
114) A code of ethics that ________ is classified as a principle-based statement.
A) communicates selection methods
B) affirms equal opportunities
C) defines conflicts of interest
D) outlines ethical tolerances
E) defines fundamental values
115) A(n) ________ code of ethics generally outlines the procedures to be used in specific
ethical situations.
A) operational
B) tactical
C) policy-based
D) credo-based
E) principle-based
116) Fostering a climate that encourages ethical behavior by the sales force requires management
to do all of the following EXCEPT:
A) establish an ethics committee.
B) ensure that top management behaves ethically.
C) discipline wrongdoers.
D) formally discourage “whistle-blowing.”
E) establish control systems.
117) According to the text, what is the single most important factor in improving the climate for
ethical behavior in a sales force?
A) The actions taken by top management
B) The establishment of whistle-blowing procedures
C) Effective goal-setting programs
D) Quick disciplinary action against offenders
E) The development of ethics training seminars
118) An ethics committee is typically:
A) composed of employees from all functional areas and managerial levels.
B) a nonessential organization in multinational corporations.
C) assigned the task of writing employee handbooks.
D) responsible for disciplining wrongdoers.
E) charged with eliminating ethical dilemmas.