Chapter 15 – Consumer Protection
1. (p. 342) The Latin phrase, caveat emptor, meaning “let the seller beware” has put sellers on
alert to look after their own interests.
2. (p. 342) Consumer advocacy groups in the United States actively promote and speak for the
interests of millions of consumers.
3. (p. 344) As business firms grow in size and market power, they have increasingly lost the
ability to dominate marketplace transactions with their customers.
4. (p. 344) Under the “right to be heard” protection, the consumer is to be assured satisfactory
quality and service at fair prices.
5. (p. 344) The consumer’s right to privacy assures that information disclosed in the course of a
commercial transaction is not shared with others unless authorized.
6. (p. 344) Consumers make less rational choices when they have accurate information about a
product.
Chapter 15 – Consumer Protection
7. (p. 345) Deceptive advertising is still legal in most countries.
8. (p. 347) The Children’s Online Privacy Protection Act limits the collection of information
online from and about children under the age of 13.
9. (p. 347 – 348) The Department of Agriculture has authority over genetically modified food and
some chemicals that may affect consumers.
10. (p. 348) The Environmental Protection Agency’s mission is to assure the safety and
effectiveness of a wide range of consumer products including pharmaceutical drugs and
foods.
11. (p. 350) In the “consumer self-help” approach to protecting consumer privacy rights, new
government regulations will protect the consumer online.
12. (p. 351) The doctrine of strict liability extends only to the retailer who is involved in selling
the product, not the manufacturer.
13. (p. 353) One reason for business efforts to reform product liability laws is the increasing cost
of insuring against liability suits.
Chapter 15 – Consumer Protection
14. (p. 355) Quality management emphasizes high quality and customer satisfaction through
continuous improvement of a company’s product or service at the final stages of the
production process.
15. (p. 356) Managing for product quality is an attempt by business to address its suppliers’
needs.
16. (p. 340) A prime social responsibility of business is to safeguard consumers:
Difficulty: Medium
17. (p. 342) Consumers have become more dependent on businesses for product quality
because:
Chapter 15 – Consumer Protection
18. (p. 342) Which organization brings together 300 nonprofit groups to espouse the consumer
viewpoint?
Difficulty: Medium
19. (p. 342 – 343) Which of the following statements is not true about the organization Consumers
Union (the publisher of Consumer Reports magazine)?
Difficulty: Medium
20. (p. 343) A goal of the consumer movement is to make consumer power:
Difficulty: Hard
21. (p. 344) Which of the following is (are) core rights of consumers?
Chapter 15 – Consumer Protection
22. (p. 344) The “right to be heard” assures that consumers’ interests will:
Difficulty: Hard
23. (p. 344) The act that requires lenders to inform borrowers of the annual rate of interest to be
charged, plus related fees and services charges is called:
Difficulty: Easy
24. (p. 345) In the United States, which of the following agencies enforces the laws prohibiting
deceptive advertising?
Difficulty: Medium
25. (p. 346) The law requiring that toys and infant products be tested before sale is called the:
Chapter 15 – Consumer Protection
26. (p. 344 – 347) Which of the following is not a goal of consumer protection laws?
Difficulty: Medium
27. (p. 344 – 347) Manufacturers making false or misleading claims about a competitor’s product
Difficulty: Easy
28. (p. 347) Before deregulation, government agencies frequently:
Difficulty: Hard
29. (p. 347) Which of the following limits the collection of information online from and about
Chapter 15 – Consumer Protection
30. (p. 347) Which of the following departments was established in 1914 and has been given
additional powers to protect consumers over the years, including in the area of online
privacy?
Difficulty: Hard
31. (p. 347) Which agency(ies) was (were) created during the great wave of consumer
regulations in the 1960s and early 1970s?
Difficulty: Easy
32. (p. 348) The main responsibility of the National Highway Traffic Safety Administration is
to:
Difficulty: Hard
33. (p. 348) Which of the following is a mission of the Food and Drug Administration?
Chapter 15 – Consumer Protection
34. (p. 349) The major federal consumer protection agencies are authorized by law to:
Difficulty: Hard
35. (p. 350) Online shoppers have always been concerned that:
Difficulty: Medium
36. (p. 350) An identifying marker placed on a user’s computer hard drive during visits to some
Web sites is called a:
Chapter 15 – Consumer Protection
37. (p. 351) When businesses adopt voluntary policies for protecting the privacy of individuals’
information disclosed during electronic transaction, this is called:
Difficulty: Medium
38. (p. 351) The burden of responsibility for product performance has shifted to the producer,
under the legal doctrine of:
Difficulty: Medium
39. (p. 351 – 352) According to the doctrine of strict liability, which of the following statements is
not true?
Difficulty: Medium
40. (p. 353) Many companies have argued that the evolution of strict liability has:
Chapter 15 – Consumer Protection
41. (p. 354) Under proposals to establish uniform federal standards for determining liability:
Difficulty: Medium
42. (p. 354 – 355) Consumer groups have generally opposed the idea of product liability reform
using which of the following arguments?
Difficulty: Hard
43. (p. 355) One alternative to product liability lawsuits is called:
Difficulty: Easy
44. (p. 356) In some cases, businesses have banded together to agree on how they will treat their
customers. This is called:
Chapter 15 – Consumer Protection
45. (p. 357) Businesses can take a number of measures to respond voluntarily to consumer
demands. Which of the following is an example of such a measure?
Difficulty: Easy
46. (p. 343) The consumer movement exists because consumers want to be treated fairly and
honestly in the marketplace. Outline and explain the additional reasons for the existence of the
consumer movement.
47. (p. 344) Consumer advocates argue that consumers are entitled to five core rights. What are
they? Explain each.
48. (p. 347 – 349) Outline some of the major government agencies responsible for consumer
related issues. What is the major mission of each?
49. (p. 350 – 351) How do new technologies increasingly enable businesses to collect and use vast
amounts of personal data about their customers and potential customers? Explain. Do you
think these trends benefit consumers or not, and why?
Chapter 15 – Consumer Protection
50. (p. 351 – 355) In your opinion, do U.S. product liability laws need to be changed? If so, how?
If not, why not? Investigate proposed changes in product liability laws over the last several
years and evaluate them.
51. (p. 355 – 358) Because of the movement towards quality management, companies are now
focusing on the customer. How does this occur? How could a specific industry be even more
socially responsible to its customers? Explain.