This is a sales tactic where a product is advertised at a
low price but when the consumer comes in he or she
finds that the product is sold out (often there was only
one in the store) or is pressured by sales people to look
at higher priced versions of the product
Failure to disclose the full
price
Bait-and-switch Price gouging None of the above
14 Horizontal price fixing is
When a company lowers its
price so far below
competitors that it drives
out competitors
When different groups are
charged different prices
When sellers agree to a price
above what it would be in a
competitive market
When sellers force retailers to
sell at specific prices
15 Promotion involves an array of tools including: Sponsorships Coupons Point of sale displays All of the above None of the above
In______ the wording is often constructed in a way
that the consumer will be erroneous conclusions about
the nature of the product.
Ambiguity in
advertisements
Concealing facts Misleading ads None of the above
These advertisements often begin with truthful
statements regarding the positive attributes of a
product:
Ambiguity in
advertisements
Concealing facts Misleading ads Price gouging
The statement that BMW “is the ultimate driving
machine” is an example of
Ambiguity in
advertisements
Predatory pricing Points of sale displays Exaggeration
There are several perspectives regarding if or to what
extent companies should companies assume liability
for harm caused by the products they produce. These
include:
The buyer beware view Contractual theory Due care All of the above None of the above
If a product injures a user because it was defective, the
manufacturer is responsible to compensate the user.
This is an example of:
Due care theory Strict liability theory Contractual view theory Predatory pricing Price gouging
This addresses the weaknesses of the buyer beware
approach by accepting that sellers and buyers do not
have equality in knowledge and expertise regarding
products
Due care theory Strict liability theory Contractual view theory All of the above None of the above
22 Strict liability theory argues that
The relationship between
the manufacturer and a
consumer is based on a
contract
Addresses the fact that
sellers and buyers may
not have the same
knowledge and expertise
regarding products
The contract has both explicit
and implied claims about the
product
Buyers have responsibility of
inspecting products before
buying them
If a product injures a user
because it was defective,
the manufacturer is
responsible to compensate
the user
In contract view, the explicit part of the contract
relates to:
The consumers’
expectations regarding
relevance, maintainability,
life, and product safety
The risk associated with
using the product, the ease
of keeping the product
working, the probability
that the product will
function as expected, the
expectations regarding the
service life of the product
Whether the product is fit for
sale and is of acceptable
quality for ordinary use.
All of the above None of the above
In contract view, the contract implies certain moral
duties for the seller which DOES NOT include:
Duty to comply with the
terms of the contract.
Duty not to misrepresent the
product in any way
Duty to disclosure the nature
of the product