1 Communities do have power over business with local laws and regulations that are heavily
influenced and developed by community members who try to balance the power between
community consumers and producers.
(A) True
(B) False
Feedback: This statement is true.
2 Which statement about regulatory agencies is not correct?
(A) The Consumer Product Safety Commission (CPSC) regulates protecting the public against
unreasonable risks of injury associated with consumer products, through setting and enforcing safety
standards.
(B) The Federal Trade Commission (FTC) regulates unfair or deceptive acts or practices of business.
(C) The Food and Drug Administration (FDA) regulates the safety of foods, drugs, cosmetics, and medical
devices.
(D) The National Highway Traffic Safety Administration (NHTSA) regulates how roads must be built to
meet national standards to minimize the number of accidents.
(E) The Securities and Exchange Commission (SEC) regulates the protection of investors; maintains fair,
orderly, and efficient markets; and facilitates capital formation.
3 A ________ is a contract in which the seller guarantees the integrity of the product, and the
buyer is entitled to compensation for any consequent harm.
(A) product
(B) collaboration
(C) consumer right
(D) liability
(E) warranty
4 Which statement best describes the product liability litigation process and the parties
involved?
(A) Product liability litigation is the process of a business (offendant) filing a lawsuit against a
firm (defendant) to be compensated for harm resulting from defective products.
(B) Product liability litigation is the process of a consumer (offendant) filing a lawsuit against a firm
(defendant) to be compensated for harm resulting from defective products.
(C) Product liability litigation is the process of a consumer (plaintiff) filing a lawsuit against a firm
(defendant) to be compensated for harm resulting from defective products or business actions.
(D) Product liability litigation is the process of a consumer (plaintiff) filing a lawsuit against a firm
(defendant) to be compensated for harm resulting from defective products but not from business actions.
(E) Product liability litigation is the process of a consumer (plaintiff) filing a lawsuit against a firm
(defendant) through the federal court system to be compensated for harm resulting from defective
products.
5 ___________ is the process of a consumer filing a lawsuit against a firm seeking
compensation for harm resulting from defective products or business actions.
(A) Consumer information
(B) Product liability litigation
(C) Defense for the current system
(D) Company negligence
(E) Absolute liability
6 Which of the following is not one of the guidelines when dealing with the media issues?
(A) Reality
(B) Truth
(C) Audience
(D) Cover-up
(E) Summary points
7 Which of the following are elements of the business-community relationship?
(A) Community power
(B) Eminent domain
(C) Layoffs and plant closings
(D) Corporate social responsibility
(E) International treaties
8 Which of the following are community involvement programs?
(A) Volunteer programs encourage and reward employees for doing work for community
nonprofit organizations, sometimes during paid work hours.
(B) Investment programs allow nonprofits to buy stock in companies at a discount rate but pay regular
dividends.
(C) Philanthropic programs give resources of products and services and finances of cash to the
community.
(D) CEOs contributing in stock option plans.
(E) Collaborative partnership programs are voluntary relationships among business, social interest
groups, and/or government to solve a social problem.
9 Which statements are correct regarding customers and consumers?
(A) Consumers do not use business products.
(B) Customers of manufacturers of products are commonly retail stores.
(C) People who buy gifts are consumers, and the recipients are customers.
(D) If you use Facebook, you are a customer, not a consumer.
(E) Customers and consumers can be the same.
10 Which statements about warranties are correct?
(A) An express warranty is an explicit claim made by the producer to the consumer.
(B) An implicit warranty is an unwritten guarantee that the product is adequate to meet reasonable
expectations for intended purposes.
(C) A full warranty must express unconditional assurance that the product will be replaced or repaired
within a reasonable time and without charge.
(D) A limited warranty conditionally excludes certain parts of the product or particular types of defects
from coverage.
(E) An extended warranty is the same as an express warranty.
11 Which of the following are criteria in making stories newsworthy?
(A) They are of interest to the audience and have social significance.
(B) They are about the negative side of people.
(C) They are about immediate or urgent issues.
(D) They include controversy or conflict.
(E) They are easily told.
12 Which of the following are roles for the media?
(A) Business groups never complain about the media because they know that it is always fair
and unbiased.
(B) The media provide information for those in the market and nonmarket environment so that people
know what is going on in the world, primarily so that business, society and government can make better
decisions.
(C) Factual stories report on why the story is important and what implications it has on society.
(D) The media shape individual attitudes and values about issues that result in public sentiment.
(E) The media are used to develop nonmarket issue agendas so that business, society and government
can determine which issues they will pursue.
13 Explain eminent domain.
Answer:
14 What is community involvement and how important is It important to business?
Answer:
15 Describe the function of the Better Business Bureau.
Answer:
16 Name four of the consumer rights.
Answer:
17 Name at least four of the major consumer protection agencies the textbook mentions.
Answer:
18 What role do the media play in business?
Answer:
19 The right to _______ gives consumers the assurance that a variety of products at
competitive prices will be available whenever possible.
(A) choose
(B) have information
(C) be heard
(D) privacy
(E) safety
20 Which of the following is not a consumer right?
(A) The right to safety protects consumers against products that are hazardous to their health
and life.
(B) The right to be informed protects consumers against the marketing of products through fraudulent,
deceitful, or grossly misleading information, advertising, labeling, or other practices.
(C) The right to satisfaction assures consumers they will be satisfied with products they choose.
(D) The right to be heard assures that consumer interests will receive full and sympathetic consideration
in the formulation of government policies, laws, and regulation.
(E) The right to privacy protects consumers from misuse of personal information.
21 How many advocacy groups are concerned with consumer issues?
(A) Only three
(B) 15–20
(C) Several dozen
(D) 100
(E) Several hundred
22 Having a good corporate reputation for being socially responsible usually does not help with
community relations.
(A) True
(B) False
23 The Worker Adjustment and Retraining Notification Act (WARN) protects communities by
requiring employers to provide notification 10 calendar days in advance of plant closings and
mass layoffs.
(A) True
(B) False
24 The role of the community relations department is to interact with community citizens and
the news media, to develop community involvement programs, and to work with local
governments.
(A) True
(B) False
25 Companies rarely give away money to charitable organizations.
(A) True
(B) False
26 The goal of the consumer movement is to counterbalance the power of business.
(A) True
(B) False
27 Businesses must be members of the Better Business Bureau.
(A) True
(B) False
28 The right to accurate information is based on the temptation of business to promote its
products in the best light possible in order to sell more products.
(A) True
(B) False
29 Consumer rights essentially came from President Richard Nixon.
(A) True
(B) False
30 Product liability is the firm’s legal responsibility for its actions and products, especially
costs or damages.
(A) True
(B) False
31 A warranty is a contract in which the seller guarantees that a customer will like the product.
(A) True
(B) False
32 The term “defective” is open to interpretation in court.
(A) True
(B) False
33 Most lawsuits regarding product liability make it to court.
(A) True
(B) False
34 Advocacy stories support a position or course of action; they are commonly editorials.
(A) True
(B) False
35 Which statement about the business–community interrelationship is not correct?
(A) Community is everywhere in the world that a business sells its products and affects
stakeholders.
(B) Business needs community support with infrastructure, transportation systems, and public safety.
(C) The community needs business for economic development, products, jobs, and tax revenues.
(D) Community can include cyber communities on the Internet.
(E) Having a good corporate reputation for being socially responsible does helps with community
relations.
36 ______ is the government‘s ability to take private property for government use.
(A) Community involvement
(B) Corporate stewardship
(C) Corporate interaction
(D) Government intervention
(E) Eminent domain
37 When businesses give and lend their resources, including products and services, to help the
community, it is referred to as _________.
(A) advocacy advertisements
(B) collaborative partnerships
(C) diversity links
(D) in-kind contributions
(E) reciprocity
38 _______ buy products from business, and _______use business products.
(A) Consumers, advocates
(B) Strategists, advocates
(C) Customers, consumers
(D) Philanthropists, customers
(E) Consumers, customers
39 What is media bias?
Answer: