Quiz Questions: Chapter Six
1. In the Market Approach to consumer protection, if consumers do not place a high value
on safety (or are unwilling to pay for it), then it is wrong to force them to accept higher
levels of safety through regulation.
a. True
2. Critics to the market approach respond that the benefits of free markets are obtained
only when the markets have all of the seven defining characteristics. Several of these
are:
a. There are numerous buyers and sellers.
b. Everyone can freely enter and exit the market.
c. The market is unregulated.
d. All the above
3. The consumers who think ahead, consider, and watch every penny they spend, knowing
how their choices will affect their preferences are known as:
a. Irrational utility minimizers
b. Rational utility maximizers
c. Rational consumption maximizers
4. Research has shown people are irrational and inconsistent when weighing choices based
on probability estimates of future costs and payoffs.
a. True
5. The ________ theory of business’ duties to consumers claims that a business has four
main moral duties: the basic duty of (a) complying with the terms of the sales contract,
and the secondary duties of (b) disclosing the nature of the product, (c) avoiding
misrepresentation, and (d) avoiding the use of duress and undue influence.
a. Contractual
b. Commercial
c. Competitive
6. The due care theory of the manufacturer’s duties to consumers is based on the idea that
consumers and sellers do not meet as equals and that the consumer’s interests are
particularly vulnerable to being harmed by the manufacturer, who has a knowledge and
an expertise that the consumer lacks.
a. True
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7. The most common criticism of advertising concerns its effect on the consumer’s beliefs.
a. True
8. Although there are some advertisements that are intended to manipulate, such
advertisements do not violate the consumer’s right to be treated as a free and equal
rational being.
a. True
9. __________is privacy with respect to a person’s inner life. This includes the person’s
thoughts and plans, personal beliefs and values, feelings, and wants.
a. Physical privacy
b. Personal privacy
c. Psychological privacy
10. Credit Solutions initially advise their clients not to pay their credit cards.
a. True
b. False
11. Credit Solutions has been sued by the attorney general of five states
a. True
12. Even though advertizing issues are complex, the must include:
a. Social effects
b. Effects on Desire
c. Effects on Belief
d. B & C
13. A study by consumer reports found errors in 43 percent of the credit reports that they
analyzed.
a. True
14. Which are the three main credit reporting companies?
a. Experian, Credex, and Your Credit
b. Experian, Real Credit, and Credibility
c. Experian, Equifax and Trans Union LLC
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© 2012 Pearson Education, Inc. All Rights Reserved.
93
15. In a narrow sense, the right to privacy can be defined as the right of persons to
determine what, to whom, and how much information about themselves will be
disclosed to other parties.
a. True