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Business Law 8th Edition Cheeseman Test Bank

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Business Law 8th Edition Cheeseman Test Bank

ISBN-13: 978-0132890410

ISBN-10: 0132890410

Description

Business Law 8th Edition Cheeseman Test Bank

ISBN-13: 978-0132890410

ISBN-10: 0132890410

 

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Business Law, 8e (Cheeseman)

Chapter 44   Consumer Protection and Product Safety

 

1) The U.S. Food and Drug Administration promotes the principle of caveat emptor in sale transactions involving food and drugs.

Answer:  FALSE

Diff: 1

Topic:  Introduction to Consumer Protection and Product Safety

Skill:  Legal Concepts

 

2) The Consumer Product Safety Commission, created in 1972, has the authority to recall unsafe toys.

Answer:  TRUE

Diff: 1

Topic:  Introduction to Consumer Protection and Product Safety

Skill:  Legal Concepts

 

3) The U.S. Department of Agriculture is the federal administrative agency that is primarily responsible for regulating meat, poultry, and other food products.

Answer:  TRUE

Diff: 1

Topic:  Meat and Related Products Safety

Skill:  Legal Concepts

 

4) The Consumer Product Safety Commission is the federal administrative agency empowered to enforce the FDCA.

Answer:  FALSE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

5) FDA approval is not mandatory for medical devices to be legally sold in the U.S.

Answer:  FALSE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

6) A manufacturer can be held liable for deceptive labeling or packaging under the Health Care Reform Act.

Answer:  FALSE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

 

7) The NLEA applies to packaged foods and other foods regulated by the Food and Drug Administration.

Answer:  TRUE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

8) Sellers of raw fruits and vegetables can adopt a voluntary approach when it comes to labeling requirements.

Answer:  TRUE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

9) Section 4205 of the Patient Protection and Affordable Health Care Act of 2010 requires restaurants and retail food establishments with 20 or more locations to disclose calorie counts of their food items.

Answer:  TRUE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

10) The Biosafety Protocol label is used to identify certain food products that have been genetically modified.

Answer:  TRUE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

11) The Drug Amendment to the FDCA gives the FDA broad powers to license new drugs in the United States.

Answer:  TRUE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

12) The FDA cannot withdraw approval of any previously licensed drug.

Answer:  FALSE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

 

13) The FDA labels ordinary household soap as a cosmetic product.

Answer:  FALSE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

14) The FDA cannot recall any cosmetics that contain unsubstantiated claims of preserving youth or increasing virility from the market.

Answer:  FALSE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

15) The FDA places a complete ban on the use of animal testing in the production of cosmetic goods.

Answer:  FALSE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

16) The FDA mandates a label of “NOT TESTED ON ANIMALS” on all cosmetic products.

Answer:  FALSE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

17) The mislabeling of medicinal devices is prohibited under the Nutrition Labeling and Education Act.

Answer:  FALSE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

18) Kidney dialysis machines are scrutinized for attainment of quality standards under the Drug Amendment to the FDCA.

Answer:  FALSE

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

19) The CPSC is an independent federal administrative agency empowered to regulate potentially dangerous consumer products and issue product safety standards.

Answer:  TRUE

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

 

20) Under the Consumer Product Safety Act, a private party can sue for an injunction to prevent violations of the act or of CPSC rules and regulations

Answer:  TRUE

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

 

21) If a model of a car has faulty airbag deployment, the Consumer Product Safety Commission has the power to recall that model on receiving complaint.

Answer:  FALSE

Diff: 2

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

22) Firearms represent an example of consumer products which do not come under the CPSC rules.

Answer:  TRUE

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

 

23) The Family Smoking Prevention and Tobacco Control Act, which requires mandatory warnings to be placed on cigarette packages, is enforced by the Health Care Reform Act.

Answer:  FALSE

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

 

24) The goal of the Health Reform Act is to increase the number of persons who have health care insurance in the United States.

Answer:  TRUE

Diff: 1

Topic:  Medical and Health Care Protection

Skill:  Legal Concepts

 

25) Under the Health Care Reform Act, persons who do not obtain health coverage will be provided free health insurance by the government.

Answer:  FALSE

Diff: 1

Topic:  Medical and Health Care Protection

Skill:  Legal Concepts

 

 

26) The Health Care Reform Act provides special subsidies to “Cadillac” health insurance programs that provide health care benefits that cost above a certain level.

Answer:  FALSE

Diff: 1

Topic:  Medical and Health Care Protection

Skill:  Legal Concepts

 

27) The Health Care Reform Act extends health care coverage to illegal immigrants.

Answer:  FALSE

Diff: 1

Topic:  Medical and Health Care Protection

Skill:  Legal Concepts

 

28) The Health Care Reform Act prohibits insurers from establishing an annual spending cap for benefit payments.

Answer:  TRUE

Diff: 1

Topic:  Medical and Health Care Protection

Skill:  Legal Concepts

29) The FTC can sue in either the state or federal courts to obtain compensation on behalf of consumers.

Answer:  TRUE

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

 

30) Proof of actual deception is required for an advertising to be considered false under Section 5 of the FTC.

Answer:  FALSE

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

 

31) Bait and switch is a type of deceptive advertising under Section 5 of the FTC Act.

Answer:  TRUE

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

 

32) In the bait and switch advertising model, the bait involves pressuring customers in a store into buying unadvertised or more expensive products.

Answer:  FALSE

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

 

33) Sales made by door-to-door salespersons are not regulated by the FTC.

Answer:  FALSE

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

 

34) The consumer must send a required notice of cancellation to the seller of a door-to-door sales contract within three days to rescind an order.

Answer:  TRUE

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

 

35) The Do-Not-Call Registry allows consumers to designate specific companies not to call them.

Answer:  TRUE

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

 

36) The U.S. Supreme Court has deemed the Do-Not-Call Registry service as an unconstitutional violation of commercial speech.

Answer:  FALSE

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

37) ________ laws are federal and state statutes and regulations that promote product safety and prohibit abusive, unfair, and deceptive business practices.

  1. A) Profit-à-prendre
  2. B) Canon
  3. C) Consumer protection
  4. D) Caveat emptor

Answer:  C

Diff: 1

Topic:  Introduction to Consumer Protection and Product Safety

Skill:  Legal Concepts

 

 

38) The ________ is a federal administrative agency that is primarily responsible for regulating the safety of meat, poultry, and other food products.

  1. A) U.S. Department of Agriculture
  2. B) Consumer Product Safety Commission
  3. C) Food and Drug Administration
  4. D) Federal Trade Commission

Answer:  A

Diff: 1

Topic:  Meat and Related Products Safety

Skill:  Legal Concepts

 

39) Jones & Hilton Co. owned a large cold storage warehouse where they stored and processed meat and meat products. An insider revealed to the media that the cold storage failed to meet numerous safety standards, encountered repeated rodent attacks, and sold potentially harmful and infected meat in the market without notifying authorities. The ________ has the authority to conduct inspections of the cold storage warehouse and initiate legal proceedings against the owners for endangering the health of consumers.

  1. A) Food and Drug Administration
  2. B) Consumer Product Safety Commission
  3. C) Federal Healthcare Commission
  4. D) U.S. Department of Agriculture

Answer:  D

Diff: 2

Topic:  Meat and Related Products Safety

Skill:  Factual Application

 

40) In which of the following cases of consumer safety violations will the U.S. Department of Agriculture be required to take action?

  1. A) A new drug was released into the market without adequate testing and this lead to adverse side effects among users.
  2. B) A brand of soft toys for infants was produced with low grade foam and fabrics that are harmful for children when ingested.
  3. C) A batch of sausages and cold cuts from a particular vendor was found to have high levels of salmonella and other pathogenic organisms.
  4. D) A fleet of cars released into the market by famous company was found to have a defective braking system which could prove fatal for owners.

Answer:  C

Diff: 2

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Factual Application

 

41) The Food, Drug, and Cosmetic Act is a federal statute that ________.

  1. A) covers all food products including poultry and processed meat
  2. B) grants approval for food additives, drugs, cosmetics, and medicinal devices
  3. C) implements the Federal Meat Inspection Act enacted in 1906
  4. D) protects the public by providing greater medical coverage from food-related illnesses

Answer:  B

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

42) Ajax, a pharmaceutical company, has designed a new medicine for morning sickness among pregnant women. Testing at their R&D center showed the drug to be highly reliable. Ajax has to approach a U.S. federal administrative agency called ________ for the drug to be deemed legal for sale to the public.

  1. A) Medicines and Healthcare products Regulatory Agency
  2. B) Consumer Product Safety Commission
  3. C) Federal Trade Commission
  4. D) Food and Drug Administration

Answer:  D

Diff: 2

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Factual Application

 

43) The Food and Drug Administration is empowered to ________.

  1. A) recall unsafe toys, appliances, and other consumer products which are harmful to users
  2. B) regulate the safety of meat, poultry, and other food products
  3. C) prosecute violators directly by imposing fines and pronouncing sentences
  4. D) obtain orders for the seizure, recall, and condemnation of harmful products

Answer:  D

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

44) The ________ is a federal statute passed in 1990 that requires food manufacturers and processors to provide nutrition information on many foods and prohibits them from making scientifically unsubstantiated health claims.

  1. A) Food, Drug, and Cosmetic Act
  2. B) Health Care and Education Reconciliation Act
  3. C) Nutrition Labeling and Education Act
  4. D) Patient Protection and Affordable Care Act

Answer:  C

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

45) The NLEA applies to packaged foods and other foods regulated by the ________.

  1. A) U.S. Department of Agriculture
  2. B) Consumer Product Safety Commission
  3. C) Patient Protection and Affordable Care Act
  4. D) Food and Drug Administration

Answer:  D

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

46) Which of the following is true of the Nutrition Labeling and Education Act?

  1. A) The NLEA is a state law and its implementation is not federally regulated.
  2. B) The NLEA applies to packaged foods and other foods regulated by the Food and Drug Administration.
  3. C) The NLEA mandates compulsory labeling for all kinds of raw and processed food with any exceptions.
  4. D) The NLEA specifically eliminates the practice of providing point-of-purchase nutrition information by sellers.

Answer:  B

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

47) “Rapid Rise” is a health drink for teenagers that was advertised with the claim that the continuous consumption of the drink over a two-month period would lead to a four-inch rise in height. This claim was not grounded in laboratory research or seen in most of its users. This act of making scientifically unsubstantiated health claims about this product is likely to be a violation of the ________.

  1. A) Health Care Reform Act
  2. B) Nutrition Labeling and Education Act
  3. C) Consumer Product Safety Act
  4. D) Patient Protection and Affordable Care Act

Answer:  B

Diff: 2

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Factual Application

 

 

At the food processing company where Mika works, his primary job responsibility is to review the quality of preservatives that are used in the food products being made. A new and highly recommended preservative that has the potential to preserve food longer without refrigeration was approved by Mika. However, Mika failed to identify that the substance used to make the particular preservative was banned.

 

48) If the food product is released with this new preservative, which of the following provisions of the NLEA would help consumers identify the banned preservative prior to consumption?

  1. A) condemnation of unfit food products
  2. B) disclosure of information on food labels
  3. C) inspection of the storage facilities
  4. D) initiating legal proceedings against violators

Answer:  B

Diff: 2

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Factual Application

49) Which of the following agencies has the power to enact the statutes that govern such a violation?

  1. A) the Medicines and Healthcare products Regulatory Agency
  2. B) the U.S. Department of Agriculture
  3. C) the Federal Trade Commission
  4. D) the Food and Drug Administration

Answer:  D

Diff: 2

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Factual Application

 

50) The U.S. Department of Agriculture places mandatory and consistent labeling requirements on ________.

  1. A) ready-to-eat meals
  2. B) raw fruits and vegetables
  3. C) raw seafood
  4. D) meat and poultry products

Answer:  D

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

 

51) The ________ requires food manufacturers and processors to disclosure uniform information about serving sizes and nutrients, and establishes standard definitions for the various terms like “low fat,” “lean” or “organic” which are indiscriminately used by food processors.

  1. A) Consumer Product Safety Act
  2. B) Nutrition Labeling and Education Act
  3. C) Patient Protection and Affordable Care Act
  4. D) Health Care Reform Act

Answer:  B

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

52) Section 4205 of the Patient Protection and Affordable Health Care Act requires restaurants and retail food establishments with 20 or more locations to disclose calorie counts of their food items and supply information on how many calories a healthy person should eat in a day. The provisions of this legislation are enforced by the ________.

  1. A) Federal Food and Drug Administration
  2. B) United Nations
  3. C) Federal Trade Commission
  4. D) Consumer Product Safety Commission

Answer:  A

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

53) Biosafety Protocol is a United Nations-sponsored protocol that requires signatory countries to place the label ________ on all genetically engineered foods.

  1. A) “Warning—unnatural food particles”
  2. B) “May contain living modified organisms”
  3. C) “FDA tested and approved food”
  4. D) “WHO tested and approved food”

Answer:  B

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

54) What is the importance of the Biosafety Protocol prescribed by the UN?

  1. A) It dictates the terms and conditions for production of genetically modified food.
  2. B) It prevents people from differentiating between normal and organic food.
  3. C) It notifies people of the presence of genetically modified food in the market.
  4. D) It assures people of the quality of the food by providing details of its testing process.

Answer:  C

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

 

55) The ________ is a federal law that gives the FDA broad powers to license new drugs in the United States.

  1. A) Drug Amendment of the FDCA
  2. B) Food Labeling and Education Act
  3. C) Health Care Reform Act
  4. D) Patient Protection and Affordable Health Care Act

Answer:  A

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

56) Which of the following is true of the FDA’s role in the introduction of a new drug in the market?

  1. A) The FDA bases its approval of a new drug on the rule of caveat emptor.
  2. B) The FDA limits itself to providing relevant suggestions to improve the drug.
  3. C) The FDA possesses the power to implement a complete ban on a questionable drug.
  4. D) The FDA prosecutes producers of questionable medicines directly by the powers vested in it by the U.S. Department of Justice.

Answer:  C

Diff: 2

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

57) The new line of fairness-enhancing products marketed by Radiance has allegedly been developed after using large-scale animal testing procedures. Insiders revealed that the high levels of lead present in the cosmetics have proven to be fatal for many of the animals used in the laboratories. Radiance is likely to be inspected for suspected criminal violations of the ________.

  1. A) Food, Drug, and Cosmetic Act
  2. B) Consumer Product Safety Act
  3. C) Health Care Reform Act
  4. D) Federal Trade Commission Act

Answer:  A

Diff: 2

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Factual Application

 

58) In which of the following ways does the FDA regulate cosmetics?

  1. A) by adding warnings for potential carcinogens
  2. B) by regulating the sale of cosmetics through exclusive FDA-approved stores
  3. C) by placing a complete ban on animal testing in the cosmetic industry
  4. D) by autonomously undertaking criminal proceedings against nonconforming cosmetic companies

Answer:  A

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

59) Which of the following statements is true with regard to the FDA?

  1. A) It places a complete ban on animal testing.
  2. B) It allows animal testing for only certain kinds of cosmetics like household soaps.
  3. C) It provides tax exemptions to companies that avoid animal testing.
  4. D) It recommends animal testing only if it increases product safety.

Answer:  D

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

60) Which of the following is true with regard to FDA regulations for cosmetics?

  1. A) There is no law in the United States against animal testing for cosmetics.
  2. B) All substances and preparations for cosmetic use are chemically proven to be free from carcinogens before sale by the FDA.
  3. C) Ordinary household soap is also evaluated in terms of its quality and safety as a cosmetic good under the FDA.
  4. D) New cosmetics are released in the market only if they have the “CRUELTY-FREE” label on their package.

Answer:  A

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

61) Which of the following would come under the purview of the Medicinal Device Amendment to the FDCA?

  1. A) a new oral medication for depression
  2. B) a new range of cosmetics to reduce signs of aging
  3. C) a new and compact heart pacemaker
  4. D) a revolutionary drug therapy for cancer

Answer:  C

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

62) Which of the following consumer products comes under the purview of the CPSC?

  1. A) aircrafts
  2. B) motor vehicles
  3. C) firearms
  4. D) children’s toys

Answer:  D

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

 

 

63) The Consumer Product Safety Commission is ________.

  1. A) a communion of two state-funded regulatory bodies working together to ensure consumer safety
  2. B) a federal body created to ensure the safety of few consumer products like motor vehicles, boats, aircraft, and firearms
  3. C) an independent federal administrative agency that regulates potentially dangerous consumer products
  4. D) a federal agency working to ensure product safety standards for food, poultry, medicines, and medical devices

Answer:  C

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

 

64) Which of the following is true of seeking injunctions on consumer products under the CPSC?

  1. A) The CPSC can only seek an injunction once a private party has lodged a compliant with it.
  2. B) Only the CPSC can sue for an injunction when CPSC rules are violated.
  3. C) A private party can sue for an injunction to prevent violations of the act or of CPSC rules and regulations.
  4. D) Injunctions cannot be pursued on products that have not yet been sold or marketed.

Answer:  C

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

65) Which of the following is a function that the Consumer Product Safety Commission is empowered to execute?

  1. A) collecting data regarding injuries caused by consumer products
  2. B) regulating the distribution of genetically modified food products
  3. C) recalling drugs that have been found to be harmful from the market
  4. D) accepting petitions from consumers on wrongly labeled food products

Answer:  A

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

 

66) Which of the following federal agencies is authorized to adopt and enforce the Family Smoking Prevention and Tobacco Control Act?

  1. A) the Consumer Product Safety Commission
  2. B) the Federal Trade Commission
  3. C) the Food and Drug Administration
  4. D) the Agency for Healthcare Research and Quality

Answer:  C

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

 

67) Which of the following is a requirement of the Family Smoking Prevention and Tobacco Control Act?

  1. A) a 2 percent increase in excise tax per cigarette package
  2. B) a warning on the top 50 percent of both the front and back of each cigarette package
  3. C) a tax exemption for companies that voluntarily display warning labels on their packages
  4. D) a hotline number to the FDA for apparent violations of the provisions of this Act

Answer:  B

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

 

68) Which of the following is true of the Health Care Reform Act?

  1. A) Excise taxes for pharmaceuticals are reduced.
  2. B) Employers of big corporations are given subsidies for providing health insurance to their employees.
  3. C) All employers are mandatorily required to provide health insurance coverage to their employees.
  4. D) Persons who do not obtain coverage will be required to pay a tax penalty to the federal government.

Answer:  D

Diff: 1

Topic:  Medical and Health Care Protection

Skill:  Legal Concepts

69) The Health Care Reform Act is an amendment of the ________ Act.

  1. A) Consumer Product Safety
  2. B) Patient Protection and Affordable Care
  3. C) Medical Device Amendment
  4. D) Federal Trade Commission

Answer:  B

Diff: 1

Topic:  Medical and Health Care Protection

Skill:  Legal Concepts

 

70) Which of the following is a new protection provided by the Health Care Reform Act for people seeking health coverage?

  1. A) imposition upon the insurers to provide a lifetime limit on health benefits to all legal citizens
  2. B) continuation of medical insurance for people who have developed a terminal disease
  3. C) prevention of insurance companies from providing health care insurance to individuals with preexisting health conditions
  4. D) provision of mandatory medical insurance for health coverage for illegal immigrants

Answer:  B

Diff: 2

Topic:  Medical and Health Care Protection

Skill:  Legal Concepts

 

 

71) The ________ prohibits health insurance companies from terminating health insurance coverage when a person gets sick.

  1. A) Health Care Reform Act
  2. B) Drug Amendment of the FDCA Act
  3. C) Medical Device Amendment Act
  4. D) Food, Drug, and Cosmetic Act

Answer:  A

Diff: 1

Topic:  Medical and Health Care Protection

Skill:  Legal Concepts

 

72) Which of the following is true of the FTC?

  1. A) The FTC can only sue in state courts.
  2. B) The FTC’s decision can be appealed in a state court.
  3. C) The FTC can sue to obtain compensation on behalf of the consumer.
  4. D) The FTC is not allowed to directly disclose its findings to the public.

Answer:  C

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

73) Which of the following would constitute a false advertising according to the Federal Trade Commission?

  1. A) sales talk
  2. B) unsubstantiated claims
  3. C) minimal commercial speech
  4. D) statements of opinion

Answer:  B

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

 

74) The FTC states that a bait and switch occurs if ________.

  1. A) the buyer comes to the store to buy unadvertised merchandise
  2. B) the buyer is not aware of the discounted merchandise in the store
  3. C) the seller shows the customer only the advertised merchandise that is on discount sale
  4. D) the seller refuses to show consumers the advertised merchandise

Answer:  D

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

 

 

75) The Do-Not-Call Registry was provided by the ________ to protect consumers from unsolicited commercial telephone calls.

  1. A) Federal Trade Commission
  2. B) Food and Drug Administration
  3. C) Consumer Product Safety Commission
  4. D) Federal Communications Commission

Answer:  A

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

 

76) Which of the following is true of the do-not-call registry for consumers?

  1. A) The registration is valid for the lifetime of the customer who opted for it.
  2. B) Telemarketers have three days to remove the customer’s name upon registry.
  3. C) Charitable and political organizations are exempted from the registry.
  4. D) Customers cannot choose the companies that they do not wish to receive calls from.

Answer:  C

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts

77) What is the United Nation’s Biosafety Protocol for genetically altered food?

Answer:  In many countries, the food is not genetically altered. However, many food processors in the United States and elsewhere around the world genetically modify some foods by adding genes from other organisms to help crops grow faster or ward off pests. Although the companies insist that genetically altered foods are safe, consumers and many countries began to demand that such foods be clearly labeled so that buyers could decide for themselves. In 2000, more than 150 countries, including the United States, agreed to the United Nations-sponsored Biosafety Protocol for genetically altered foods. The countries agreed that all genetically engineered foods would be clearly labeled with the phrase “May contain living modified organisms.” This allows consumers to decide on their own whether to purchase such altered food products.

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

78) Give an account of the regulation of medicinal devices in the United States?

Answer:  In 1976, Congress enacted the Medicinal Device Amendment to the FDCA. This amendment gives the FDA authority to regulate medicinal devices, such as heart pacemakers, kidney dialysis machines, defibrillators, surgical equipment, and other diagnostic, therapeutic, and health devices. The mislabeling of such devices is prohibited. The FDA is empowered to remove “quack” devices from the market.

Diff: 1

Topic:  Food, Drugs, and Cosmetics Safety

Skill:  Legal Concepts

 

 

79) What are the powers of the Consumer Product Safety Commission? Name some consumer products excluded from the purview of the CPSC.

Answer:  The CPSC is an independent federal administrative agency empowered to (1) adopt rules and regulations to interpret and enforce the CPSA, (2) conduct research on the safety of consumer products, and (3) collect data regarding injuries caused by consumer products. Certain consumer products, including motor vehicles, boats, aircraft, and firearms, are regulated by other government agencies and not by the CPSC.

Diff: 1

Topic:  Product and Automobile Safety

Skill:  Legal Concepts

 

80) List out the new protections that are available under the Health Care Reform Act of 2010.

Answer:  The Health Care Reform Act provides a number of new protections for insured persons.

∙     Prevent insurance companies from denying health care insurance to individuals with preexisting health conditions

∙     Prohibit health insurance companies from terminating health insurance coverage when a person gets sick

∙     Prohibit insurers from establishing an annual spending cap for benefit payments

∙     Prohibit insurers from imposing lifetime limits on benefit payments

∙     Require health plans that provide dependent coverage to continue coverage for a dependent child until the child turns 26 years of age

Diff: 2

Topic:  Medical and Health Care Protection

Skill:  Legal Concepts

81) What is the bait and switch advertising model?

Answer:  Bait and switch is a type of deceptive advertising under Section 5 of the FTC Act. It occurs when a seller advertises the availability of a low-cost discounted item (the “bait”) to attract customers to its store. Once the customers are in the store, however, the seller pressures them to purchase more expensive merchandise (the “switch”). The FTC states that a bait and switch occurs if the seller refuses to show consumers the advertised merchandise, discourages employees from selling the advertised merchandise, or fails to have adequate quantities of the advertised merchandise available.

Diff: 1

Topic:  Unfair and Deceptive Practices

Skill:  Legal Concepts