1. Quality and safety of products are central to consumers’ concerns.
a.
True
b.
False
2. The “subjective calculation” for value is a comparison of quality received for the price spent.
a.
True
b.
False
3. By definition, quality does not include service.
a.
True
b.
False
4. Court cases and legal doctrine now make it clear that business is responsible for product safety.
a.
True
b.
False
5. The challenge that management faces is to make products as safe as possible and affordable to consumers.
a.
True
b.
False
6. No matter how careful business is regarding the safety of its products, product liability suits are inevitable.
a.
True
b.
False
7. U.S. residents, more than people in other countries, tend to sue when they are harmed.
a.
True
b.
False
8. One concern about product liability is the size of the financial awards won in court.
a.
True
b.
False
9. Under the doctrine of strict liability, there is no legal defense for placing on the market a product that is dangerous to a
consumer because of a known or knowable defect unless an argument of due diligence is allowed.
a.
True
b.
False
10. The standard of absolute liability is less demanding than that of strict liability.
a.
True
b.
False
11. Market share liability is rarely used today due to the absence of punitive damages.
a.
True
b.
False
12. The debate over product liability law continues.
a.
True
b.
False
13. The Consumer Product Safety Commission is an independent laboratory that has power of persuasion only.
a.
True
b.
False
14. The Consumer Product Safety Commission’s power and budgets have been subject to the administration in office.
a.
True
b.
False
15. The Consumer Product Safety Commission plays an important role for consumers regarding unsafe products
a.
True
b.
False
16. The Food and Drug Administration grew out of the work of one man.
a.
True
b.
False
17. The Food and Drug Administration and the CPSC have been controversial over the decades.
a.
True
b.
False
18. Traditionally, the Food and Drug Administration’s primary concern has been the “War on Drugs.”
a.
True
b.
False
19. Business’s response to consumerism has consistently been to meet consumers’ demands as quickly and effectively as
possible.
a.
True
b.
False
20. A basic premise of Total Quality Management (TQM) is that the product designer is the final judge of quality.
a.
True
b.
False
21. The meaning of product quality is uniform to all.
a.
True
b.
False
22. Which of the following is not a driver of the quest to improve product and service quality?
a.
the demands of a competitive marketplace
b.
cost controls
c.
an increasingly sophisticated consumer base
d.
the threat of product liability lawsuits
23. The two central issues of goods and services are
a.
price and warranties.
b.
reliability and durability.
c.
quality and safety.
d.
value and function.
24. All of the following are reasons given for the current obsession with quality except
a.
the average consumer demands more.
b.
global competitiveness.
c.
the Internet.
d.
employee satisfaction.
25. Which of the following is not a dimension of quality listed in the textbook?
a.
performance
b.
durability
c.
status
d.
aesthetics
26. All of the following are dimensions of quality except
a.
features.
b.
conformance.
c.
serviceability.
d.
objectivity.
27. The ethical theory based on the concept of duty that states that firms have a responsibility to comply with the terms of
the sale, inform the customer about the product, not misrepresent anything, and not coerce the customer is
a.
contractual theory.
b.
due care theory.
c.
social costs view.
d.
caveat emptor.
28. The ethical theory based on the concept of duty that focuses on the relative vulnerability of the customer is
a.
contractual theory.
b.
due care theory.
c.
social costs view.
d.
caveat vendor.
29. The ethical theory based on the concept of duty that suggests that if a product causes harm, the firm should pay the
costs of any injury is
a.
contractual theory.
b.
due care theory.
c.
social costs view.
d.
caveat vendor.
30. The legal view of “let the buyer beware” that prevailed throughout most of history was
a.
caveat vendor.
b.
e pluribus unum.
c.
norvus ordo seclorum
d.
caveat emptor.
31. The current legal view of “let the seller beware” is
a.
caveat vendor.
b.
e pluribis unum.
c.
norvus ordo seclorum.
d.
caveat emptor.
32. Which of the following is not on the top ten list of safety principles?
a.
Build safety into product design.
b.
Educate consumers about product safety.
c.
Allow a margin of error for the consumer.
d.
Learn from your and others’ mistakes.
33. All of the following are in the top ten principles of safety except
a.
fully investigate product safety incidents.
b.
encourage customers to try out the product before purchasing it.
c.
report product safety defects promptly.
d.
track your product’s safety performance.
34. Which of the following is not an allegation commonly made in product liability suits?
a.
The product was improperly manufactured.
b.
The product’s design was defective.
c.
The manufacturer failed to provide satisfactory instructions.
d.
The product was produced under inhumane conditions.
35. The primary responsibility for product safety lies with the
a.
consumer.
b.
government.
c.
producer.
d.
Consumer Product Safety Commission.
36. Which of the following is not one of the top consumer product categories most frequently associated with injuries
requiring hospital treatment?
a.
sports and recreational activities
b.
home maintenance and construction
c.
toys and children’s products
d.
automobiles
37. Reasons to be concerned about product liability include all of the following except
a.
the sheer number of cases.
b.
the number of trial attorneys being licensed.
c.
the propensity of people to sue when they are unhappy.
d.
the growing size of financial awards.
38. The legal principle that anyone in the value chain of a product is liable for harm caused to the user if the product as
sold was unreasonably dangerous is
a.
strict liability.
b.
absolute liability.
c.
relative liability.
d.
market share liability.
39. Due diligence means that a company
a.
has done sufficient preparatory work to produce a safe product.
b.
the company has successfully passed an OSHA safety audit.
c.
has taken every possible precautionary step possible and followed all industry standards.
d.
has studied the problem extensively.
40. The fact that a company is responsible for the harm done to customers by its product even if it can show that it did its
best according to the state of the art in the industry at that time is called
a.
strict liability.
b.
absolute liability.
c.
historical liability.
d.
market share liability.
41. A company that is held responsible for the damage caused by its product in proportion to its percentage of industry
sales is subject to
a.
strict liability.
b.
absolute liability.
c.
relative liability.
d.
market share liability.
42. The Tylenol case in the 1980s, in which capsules were injected with cyanide, is an example of
a.
product extortion.
b.
product liability.
c.
product tampering.
d.
product packaging.
43. Business claims that current product liability law suffers from all of the following problems except
a.
inefficiency.
b.
bias.
c.
raising the costs of litigation.
d.
imposition of a hidden tax on consumers.
44. Which of the following is not a way in which the Consumer Product Safety Commission works to reduce the risk of
harm from consumer products?
a.
developing voluntary standards within an industry
b.
issuing and enforcing mandatory standards
c.
lobbying Congress to pass new consumer protection laws
d.
conducting research on potential product hazards
45. The Consumer Product Safety Commission works to reduce the risk of harm from consumer products in all of the
following ways except
a.
banning consumer products.
b.
passing legislation outlawing products.
c.
obtaining recall of products.
d.
informing and educating consumers.
46. Early research conducted in the organization later known as the Food and Drug Administration fed small doses of
poison to
a.
rats.
b.
chimpanzees.
c.
the “Death Squad.”
d.
the “Poison Squad.“
47. The Food and Drug Administration regulates all of the following except
a.
food.
b.
drugs.
c.
cosmetics.
d.
personal care products.
48. Which of the following is not part of the FDA‘s mission?
a.
to help identify and develop new foods and drugs
b.
to support better informed decisions about FDA-regulated products
c.
to protect the public health
d.
to enhance oversight of FDA-regulated products