117. In Wyeth v. Levine, where Levine sued the drug developer Wyeth for failure to warn after she lost her forearm
and hand after being given a drug by IV–push, a method known to have risks, the U.S. Supreme Court:
a. dismissed the state court‘s judgment for Levine because it was impossible for Wyeth to comply with both
federal and state labeling regulations
b. dismissed the state court‘s judgment for Levine because it was not impossible for Wyeth to comply with both
federal and state labeling regulations
c. reversed the state court’s decision for Levine and ordered her to pay Wyeth’s attorney fees
d. awarded Levine additional damages
e. none of the other choices are correct
118. The “learned intermediary” doctrine:
a. shields a physician from liability because of a drug company’s mistake in dosage instructions
b. is invoked by regulatory agencies in their arguments in court arguments in support of new regulations
c. shields a drug manufacturer from liability when the doctor is liable for misuse of the drug
d. holds that the FDA has gone too far in preventing new, effective drugs from reaching the market in less time
e. holds federal regulatory agencies supreme in all matters regarding control of product safety
119. The “learned intermediary” doctrine:
a. shields a physician from liability because of a drug company’s mistake in dosage instructions
b. is invoked by regulatory agencies in their arguments in court arguments in support of new regulations
c. holds federal regulatory agencies supreme in all matters regarding control of product safety
d. holds that the FDA has gone too far in preventing new, effective drugs from reaching the market in less time
e. none of the other choices
120. The shields drug manufacturers from liability in cases where doctors misuse drugs.
a. learned intermediary doctrine
b. medical intermediary doctrine
c. misuse doctrine
d. professional intermediary doctrine
e. physician intermediary doctrine
121. The shields drug manufacturers from liability in cases where doctors misuse drugs.
a. physician intermediary doctrine
b. medical intermediary doctrine
c. misuse doctrine
d. professional intermediary doctrine
e. none of the other choices are correct
122. In addition to having the power to decide when foods and drugs will be allowed to be marketed, the FDA can
remove products from the market. An example of the FDA’s use of its power to remove products from the market
is the:
a. recall of GM trucks from the market
b. removal of certain orange juice from the market
c. removal of high–fat pork products from the market
d. removal of low–SPF tanning products from the market
e. removal of animal-tested cosmetics from the market
123. In addition to having the power to decide when drugs and certain food products will be marketed, the FDA can
remove products from the market. An example of the FDA’s use of its power to remove products from the market
is the:
a. recall of GM trucks from the market
b. removal of animal-tested cosmetics from the market
c. removal of high–fat pork products from the market
d. removal of low–SPF tanning products from the market
e. none of the other choices
124. A noteworthy change at the FDA in recent years is its:
a. greater reluctance to approve drugs for use in life–threatening situations due to high toxicity of such drugs
b. regulation of the sale of fish and shellfish
c. increased inspection of foreign fruit shipments
d. allowing quicker approval for use of drugs that show promise in treating life-threatening diseases
e. dropping the quarantine requirements that apply to animals brought into the U.S.
125. A noteworthy change at the FDA in recent years is its:
a. greater reluctance to approve drugs for use in life–threatening situations due to high toxicity of such drugs
b. regulation of the sale of fish and shellfish
c. increased inspection of foreign fruit shipments
d. dropping the quarantine requirements that apply to animals brought into the U.S.
e. none of the other choices
126. The Federal Trade Commission was established in:
a. 1909
b. 1915
c. 1920
d. 1937
e. 1950
127. The Federal Trade Commission regulates:
a. deceptive business practices
b. false advertising claims
c. unfair business practices
d. deceptive business practices and false advertising claims
e. deceptive business practices and false advertising claims and unfair business practices
128. The Federal Trade Commission regulates:
a. deceptive business practices
b. false advertising claims
c. highly risky stock deals
d. deceptive business practices and false advertising claims
e. deceptive business practices and false advertising claims and highly risky stock deals
129. The Federal Trade Commission investigates:
a. unfair and deceptive practices
b. tax evasion practices
c. profitable practices
d. legal practices
e. drug development
130. FTC staff members propose complaints to:
a. five executives
b. ten commissioners
c. five commissioners
d. district courts
e. the U.S. Supreme Court
131. For a complaint proposed to the five commissioners by an FTC staff member to be officially issued:
a. there must be unanimous agreement
b. at least 2 commissioners must vote for it
c. at least 3 commissioners must vote for it
d. at least 1 commissioner must vote for it
e. 4 out of 5 commissioners must vote for it
132. FTC consent decrees agreed to by firms accused of illegal trade practices:
a. contain the terms of a settlement
b. may include redress for consumers
c. include possible payment of civil penalties
d. contain the terms of a settlement and may include redress for consumers
e. contain the terms of a settlement and may include redress for consumers and include possible payment of
civil penalties
133. FTC consent decrees agreed to by firms accused of illegal trade practices:
a. contain the terms of a settlement
b. may include redress for consumers
c. may include prison time for scam operators
d. contain the terms of a settlement and may include redress for consumers
e. contain the terms of a settlement and may include redress for consumers and may include prison time for
scam operators
134. Which of the following is often contained in consent decrees agreed upon by the parties charged in an FTC
complaint:
a. terms of a settlement
b. redress for consumers
c. payment of civil penalties
d. prohibition of certain practices
e. all of the other specific choices are correct
135. Which of the following is not part of the FTC policy statement for determining if a practice is deceptive?
a. there is a misrepresentation or omission of information in a communication to consumers
b. the deception is likely to mislead a reasonable consumer
c. there is proximate cause between the deception and the losses suffered by consumers who are misled
d. the deception is material⎯likely to mislead the consumer to his or her detriment
e. all of the other choices are a part of the deception standard
136. Which of the following is part of the FTC policy statement for determining if a practice is deceptive?
a. there is a representation or omission of information in a communication to consumers
b. the deception is likely to mislead a reasonable consumer
c. the deception is material⎯likely to mislead the consumer to his or her detriment
d. there is a representation or omission of information in a communication to consumers and the deception is
likely to mislead a reasonable consumer
e. there is a representation or omission of information in a communication to consumers and the deception is
likely to mislead a reasonable consumer and the deception is material⎯likely to mislead the consumer to his or
her detriment
137. Which of the following is part of the FTC policy statement for determining if a practice is deceptive?
a. there is a representation or omission of information in a communication to consumers
b. the deception is likely to mislead a reasonable consumer
c. the deception may cause physical harm to consumers
d. there is a representation or omission of information in a communication to consumers and the deception is
likely to mislead a reasonable consumer
e. there is a representation or omission of information in a communication to consumers and the deception is
likely to mislead a reasonable consumer and the deception may cause physical harm to consumers
138. Which of the following is part of the FTC’s three part test for deciding whether a particular act or practice is
deceptive:
a. there is a misrepresentation or omission of information in a communication to consumers
b. the deception is likely to mislead a reasonable consumer
c. the deception is material
d. all of the other specific choices are correct
e. none of the other specific choices are correct
139. A material deception is one that:
a. is likely to be misleading to the detriment of consumers
b. involves the material used to make the product
c. involves the production process
d. leads the consumer to believe the product is cheaper than it is
e. none of the other choices are correct
140. Advertisements directed at children or ill people:
a. are held to a lower standard than other ads
b. are held to a tougher standard than other ads
c. are less common than other ads
d. are unregulated
e. may not contain bad language
141. Which type of advertisement would be held to a tougher standard than the others:
a. ads directed at children
b. ads directed at middle aged consumers
c. ads directed at doctors
d. ads directed at “reasonable” persons
e. ads directed at professors
142. Which type of advertisement would be held to a tougher standard than the others:
a. ads directed at ill people
b. ads directed at middle aged consumers
c. ads directed at doctors
d. ads directed at “reasonable” persons
e. ads directed at professors
143. A company mails consumers cards telling them they have won valuable prizes. When a consumer attempts to
collect her prize, she discovers that she must pay $500 to collect the goods. In this case the FTC is likely to:
a. seek a consent decree to end the practice
b. only allow consumers to use credit cards, not cash, to purchase the goods
c. have nothing to do with this case, it falls with the jurisdiction of the FBI
d. any of the other choices
e. none of the other choices are correct
144. Which of these is most likely to be attacked by the FTC as a deceptive business practice?
a. selling stock to investors in a company for three times its true value
b. charging 25% interest on consumer loans when the market rate of interest is 10%
c. mailing office supplies to corporations that did not order them, but then pay the bill because they thought they
did order them
d. telling consumers that a brand of jeans is special and selling them for double what other jeans sell for, when
they are the same as other jeans except for the name
e. all of the other choices
145. Which of these is most likely to be attacked by the FTC as a deceptive business practice?
a. selling stock to investors in a company for three times its true value
b. charging 25% interest on consumer loans when the market rate of interest is 10%
c. selling original art to consumers at prices significantly above market value
d. telling consumers that a brand of jeans is special and selling them for double what other jeans sell for, when
they are the same as other jeans except for the name
e. none of the other choices
146. An art gallery sells fake “authorized” Vincent Van Gogh prints to clients for $50,000 each, telling buyers their
purchases are good investments. If the FTC sues, the gallery will:
a. win because purchasing the prints did not harm the clients
b. win because the doctrine of caveat emptor applies to art
c. win because the purchasers are sophisticated art investors
d. lose because its actions meet the FTC test for deception
e. lose because Van Gogh is currently out of vogue
147. The FTC test for unfairness does not include which of the following elements, as applied to business practice?
a. it causes substantial harm to consumers
b. consumers cannot reasonably avoid the injury
c. consumers cannot sue the business because the losses per person are too small
d. the injury is harmful in its net effects
e. all of the other choices are required elements
148. The FTC test for unfairness does not include which of the following elements, as applied to business practice?
a. it causes substantial harm to consumers
b. consumers cannot reasonably avoid the injury
c. the injury is harmful in its net effects
d. it causes substantial harm to consumers and consumers cannot reasonably avoid the injury
e. it causes substantial harm to consumers and consumers cannot reasonably avoid the injury and the injury is
harmful in its net effects
149. According to the FTC, which of the following things would indicate a unfair act or practice:
a. the act or practice causes substantial harm to consumers
b. consumers cannot reasonably avoid injury
c. the injury from the act or practice is harmful in its net effects
d. all of the other specific choices are correct
e. none of the other specific choices are correct
150. An extermination company promised customers who had their houses treated for termites that they had a life-time
guarantee for free re-treatment if they paid a small fixed annual fee. The company lost money on the guarantee
and so it raised the fee. If the FTC sued the company, it would claim the practice was:
a. unfair and deceptive
b. deceptive only
c. unfair only
d. a violation of the Cooling–Off Rule
e. none of the other choices
151. Telemarketers are subject to which of the following:
a. the Telephone Consumer Protection Act
b. the Telemarketing and Consumer Fraud and Abuse Prevention Act
c. the Telemarketing Protocol Act
d. both choices a and b are correct
e. both choices b and c are correct
152. In Federal Trade Commission v. John Beck Amazing Profits, where Beck was sued by the FTC for
deception in the sale of his “wealth creation” products, the court held that:
a. Beck‘s actions were “neutral“ in that they did not make false statements; consumers may have inferred
wrong things, but that is not a violation
b. the FTC was correct that Beck‘s infomercials contain misleading information that is material, so the sales
would be stsopped
c. the FTC showed that the information presented by Beck was misleading, but failed to show that any harm
had been inflicted on consumers
d. since Beck was only presenting information, that is protected by the First Amendment; so long as he did
not actually make investments on behalf of investor/consumers, there was no actionable violation
e. Beck operated an internet-based company not regulated by the Telecommunications Act
153. In Federal Trade Commission v. John Beck Amazing Profits, where Beck was sued by the FTC for
deception in the sale of his “wealth creation” products, the court held that:
a. Beck‘s actions were “neutral“ in that they did not make false statements; consumers may have inferred
wrong things, but that is not a violation
b. Beck operated an internet-based company not regulated by the Telecommunications Act
c. the FTC showed that the information presented by Beck was misleading, but failed to show that any harm
had been inflicted on consumers
d. since Beck was only presenting information, that is protected by the First Amendment; so long as he did
not actually make investments on behalf of investor/consumers, there was no actionable violation
e. none of the other choices are correct
154. Which of the following is a part of the FTC‘s policy about advertising:
a. advertising must be truthful and non-deceptive
b. advertisers must have evidence to back up their claims
c. advertisements cannot be unfair
d. all of the other specific choices are correct
e. none of the other specific choices are correct
155. The FTC uses the to put its policy about advertising into effect:
a. advertising monitoring program
b. advertising regulation program
c. advertising substantiation program
d. advertising decree program
e. legitimate advertising program
156. The FTC uses the to put its policy about advertising into effect:
a. advertising monitoring program
b. advertising regulation program
c. legitimate advertising program
d. advertising decree program
e. none of the other choices are correct
157. Which of the following is NOT an example of deceptive advertising targeted by the FTC:
a. describing pastries made in America as Danish pastries
b. claiming that “Hooked on Phonics” can teach people with learning disabilities to read
c. claiming that Frosted Mini-Wheats improve children‘s attentiveness
d. claiming that Rice Krispies increase immunity to disease
e. all of the other specific choices are correct
158. Which of the following is NOT an example of deceptive advertising targeted by the FTC:
a. claiming that “Hooked on Phonics” can teach people with learning disabilities to read
b. claiming that Frosted Mini–Wheats improve children‘s attentiveness
c. claiming that Rice Krispies increase immunity to disease
d. all of the other specific choices are correct
e. none of the other specific choices are correct
159. Most deceptive advertising cases are settled by:
a. the advertiser agreeing to stop making false claims
b. the advertiser paying a fine and continuing to make false claims
c. lengthy and expensive court cases
d. the advertiser going to jail
e. none of the other choices are correct
160. Gold Hair shampoo advertises that it is the best for bringing out golden highlights of people with blond hair. Gold
Hair ads state: “Tests prove that our shampoo is superior to other shampoos in making blond hair shine like gold.”
What FTC program monitors such claims?
a. the product purity program
b. the advertising substantiation program
c. the proof of product program
d. the consent decree program
e. the deceptive acts program
161. Gold Hair shampoo advertises that it is the best for bringing out golden highlights of people with blond hair. Gold
Hair ads state: “Tests prove that our shampoo is superior to other shampoos in making blond hair shine like gold.”
What FTC program monitors such claims?
a. the product purity program
b. the deceptive acts program
c. the proof of product program
d. the consent decree program
e. none of the other choices
162. A company advertises that test driving a car from New York to Los Angeles got 35 miles per gallon. That is true,
but the mileage was achieved by carefully driving at the speed limit, which resulted in better mileage than the
ordinary driver gets. Under the FTC deception policy, this ad is:
a. not deceptive; because most consumers understand that test mileage is not the same as regular highway
driving
b. not deceptive by definition if the company can provide documents that show that the tests were accurate
c. deceptive because the ad omits important facts and fails to provide full information
d. deceptive because the ad will mislead consumers who do not know how such mileage tests are conducted
e. none of the other choices
163. A company advertises that test driving a car from New York to Los Angeles got 35 miles per gallon. That is true,
but the mileage was achieved by carefully driving at the speed limit, which resulted in better mileage than the
ordinary driver gets. Under the FTC deception policy, this ad is:
a. not deceptive because the ad has no impact on consumer behavior
b. not deceptive by definition if the company can provide documents that show that the tests were accurate
c. deceptive because the ad omits important facts and fails to provide full information
d. deceptive because the ad will mislead consumers who do not know how such mileage tests are conducted
e. none of the other choices
164. “Buffo will cure your headache“ the ad reads. Buffo, like other pain relievers, helps most people feel better, but it
does not cure headaches, it just helps hide the pain, and it does not prevent future headaches. Under the FTC
deceptive advertising standard, this ad is:
a. not deceptive because most people understand how medicine like Buffo works
b. not deceptive only if the company can document that Buffo in fact does cure headaches
c. deceptive because products involving medicines must have very accurate ads
d. deceptive because it will mislead reasonable consumers as to the true nature of the product
e. none of the other choices
165. “Buffo will cure your headache“ the ad reads. Buffo, like other pain relievers, helps most people feel better, but it
does not cure headaches, it just helps hide the pain, and it does not prevent future headaches. Under the FTC
deceptive advertising standard, this ad is:
a. not deceptive if the FDA has approved the ad
b. not deceptive only if the company can document that Buffo in fact does cure headaches
c. deceptive because products involving medicines must have very accurate ads
d. unfair to competitors who do not make such strong claims about their products
e. none of the other choices
166. The FTC sued the company that produces “Hooked on Phonics.” The company claimed its products could teach
users, even learning disabled users, how to read. In this case:
a. the company had to stop making such unsubstantiated claims
b. the company proved that its products did what they claimed, so the ads were allowed
c. the company won a cease-and-desist order against government harassment
d. the company proved that its products did what they claimed, so the ads were allowed and the company won
a cease-and-desist order against government harassment
e. none of the other choices
167. In Telebrands v. FTC the FTC sued a company selling an electronic muscle simulation abdominal belt, which the
FTC claimed did nothing, but the good looking models in the ads implied that people using the product would
become slim. The appeals court held that:
a. the FTC was right so company had to stop making such unsubstantiated claims
b. the company proved that its products did what they claimed, so the ads were allowed
c. the company could have a cease-and-desist order against government harassment against a protected right
of free speech
d. while the product was probably useless, the ads in fact did not say anything incorrect; the company had the
right to use good looking models to advertise its product so long as it did not make false claims
e. none of the other choices
168. In Telebrands v. FTC the FTC sued a company selling an electronic muscle simulation abdominal belt, which the
FTC claimed did nothing, but the good looking models in the ads implied that people using the product would
become slim. The appeals court held that:
a. the ads did not meet the FTC standard for deception, so could continue
b. the company proved that its products did what they claimed, so the ads were allowed
c. the company could have a cease-and-desist order against government harassment against a protected right
of free speech
d. while the product was probably useless, the ads in fact did not say anything technically incorrect; the
company had the right to use good looking models to advertise its product so long as it did not make false
claims
e. none of the other choices