BUS340 Bedford Ch 13

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emach532
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228635
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BUS340 Bedford Ch 13
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2013-07-30 16:43:12
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BUS340 Bedford 13
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  1. A manufacturer’s duty of care does not extend to the inspection and test­ing of products bought to incorporate in the final product.

    True

    False
    False
  2. To generate sales, Yakkity-Yak, Inc., uses phone solicitation. Under federal law and Federal Trade Commission regulations, in soliciting business, Yakkity-Yak’s telemarketers must

    a. disclose all material facts related to a sale.

    b. identify the seller’s name (only if asked).

    c. refrain from calling consumers who have not requested a call.

    d. speak clearly and conspicuously.
    a. disclose all material facts related to a sale.
  3. Miracle Products, Inc., engages in de­ceptive advertising when it markets its product Weight-Off as able to help consumers lose weight in their sleep. Miracle is ordered to include in all future adver­tising of Weight-Off the statement, “Weight-Off will not cause anyone to lose weight in their sleep.” This is

    a. a counteradvertising order.

    b. a multiple product order.

    c. bait-and-switch advertising.

    d. excessive abuse of authority.
    a. a counteradvertising order.
  4. A seller must provide a written warranty for consumer goods.

    True

    False
    False
  5. A manufacturer’s liability to an injured party on a strict product liability theory is limited to a refund or a replacement of the defective product.

    True

    False
    False
  6. Oven Products Company makes microwave ovens. Pico discovers that his Oven Products oven is defective and sues the maker for product liabil­ity based on strict liability. To win, Pico must show that

    a. Oven Products sold the oven to Pico.

    b. Pico knew and appreciated the risk caused by the defect.

    c. Pico suffered an injury caused by the defect.

    d. the “defect” was a commonly known danger.
    c. Pico suffered an injury caused by the defect.
  7. On request, a consumer may obtain the source of any information being given out by a credit agency.

    True

    False
    True
  8. Good Tire Company and Hiway Auto Service enter into a contract for a sale of tires. Good Tire is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises

    a. automatically in sales contracts.

    b. only if the buyer asks for it.

    c. only if the seller does not expressly disclaim it.

    d. only in conjunction with lease contracts, not sales contracts.
    a. automatically in sales contracts.
  9. Prime Equity Company extends credit in the ordinary course of its busi­ness to consumers. Under the Truth-in-Lending Act, Prime must inform a prospective borrower of

    a. other lenders’ credit terms.

    b. Prime’s credit terms.

    c. Prime’s financial situation.

    d. the borrower’s credit score.
    b. Prime's credit terms.
  10. Strict liability applies to the suppliers of component parts.

    True

    False
    True
  11. The Fair Debt Collection Practices Act applies to anyone who tries to col­lect a debt.

    True

    False
    False
  12. Parker, a salesperson for Quality Textiles, Inc., shows Rosa, a fabric buyer for Style Clothing Company, samples of cloth, stating that any ship­ment will match the samples. This statement is

    a. an express warranty.

    b. an implied warranty.

    c. a warranty of title.

    d. puffery.
    a. an express warranty
  13. Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, “This is the best car I’ve ever seen.” This statement is

    a. an express warranty.

    b. an implied warranty.

    c. a warranty of title.

    d. puffery.
    d. puffery
  14. Counteradvertising is advertising that counters a competitor’s claims.

    True

    False
    False
  15. Big Screen Video Corporation sells high-definition television sets. Under most cir­cum­stances, Big Screen Video will be presumed to have warranted that its title to the TVs is

    a. the same as each brand’s name.

    b. none of the choices—a warranty of title is not presumed.

    c. good and valid.

    d. the best that money can buy.
    c. good and valid.
  16. Dependable Appliances, Inc., and Elain enter into a contract for a sale of kitchen appliances. Dependable, a merchant who deals in goods of the kind sold, notes that its goods come with an implied warranty of merchantability. Under the UCC, this means that the goods are reasonably

    a. fit for the buyer’s particular purpose.

    b. fit for the ordinary purpose for which such goods are used.

    c. suitable for resale at an acceptable price.

    d. the best quality that money can buy.
    b. fit for the ordinary purpose for which such goods are used.
  17. One requirement for a product liability suit based on strict liability is a failure to exercise reasonable care.

    True

    False
    False
  18. A collection agency cannot contact a debtor at the debtor’s place of employment if the employer objects.

    True

    False
    False
  19. Promises of fact made during the bargaining process are not express warranties.

    True

    False
    False
  20. A consumer who believes that he or she has been or may be victimized by identity theft may place an alert on his or her credit file.

    True

    False
    True
  21. A credit-reporting agency may issue a credit report to anyone who asks.

    True

    False
    False
  22. Garden Tool Company makes hedge trimmers. Troy is injured while using a Garden Tool trimmer and sues the company for product liability based on neg­ligence. To win, Troy must show that

    a. Garden Tool did not use due care with respect to the trimmer. 

    b. Garden Tool misrepresented a material fact regarding the trimmer.

    c. Troy was experienced in the use of trimmers.

    d. Troy was in privity of contract with Garden Tool.
    a. Garden Tool did not use due care with respect to the trimmer.
  23. GR8 Fashion, Inc., complains to the Federal Trade Commission (FTC) about an ad broadcast by Hotte Clothes Company, GR8’s competitor. The FTC investigates and concludes that the ad is deceptive. The FTC’s next step is to

    a. conduct negotiations between the competitors.
     
    b. draft a formal complaint.

    c. issue a cease-and-desist order.

    d. permit GR8 to broadcast similarly deceptive counteradvertising.
    b. draft a formal complaint.
  24. On behalf of RiteNow Collection Agency, Sid poses as a police officer in an attempt to collect payment from Tylo for a shipment of scuba equipment that she returned to Undersea Company two months earlier. This violates

    a. no federal law.

    b. the Fair Credit Reporting Act.

    c. the Fair Debt Collection Practices Act.

    d. the Truth-in-Lending Act.
    c. the Fair Debt Collection Practices Act.
  25. In the ordinary course of business, EZ Funds Corporation offers credit to Fay and other consumers and reports on the loans to credit agencies. To save time and money, EZ generally does not correct or update its reported information. This is most likely to result in

    a. a levy of a nominal fine.

    b. an assessment of damages.

    c. an order of rescission of the loan contracts.

    d. no sanctions.
    b. an assessment of damages.
  26. A public policy underlying the imposition of strict product liability is that consumers should be protected against unsafe products.

    True

    False
    True
  27. Wheels & Deals Corporation is subject to the Truth-in-Lending Act, which concerns

    a. the credit-worthiness of certain financial institutions and lenders.

    b. the disclosure of credit terms in certain transactions.

    c. the limits on certain types of credit that a creditor may grant.

    d. the limits on certain types of debt that a consumer can accrue.
    b. the disclosure of credit terms in certain transactions.
  28. The test for whether an ad is deceptive is whether a reason­able con­sumer would be misled. 

    True

    False
    True
  29. Furniture Depot sells Gail a bedroom suite on credit. Gail fails to make the scheduled payments for six months. Furniture Depot sends her a let­ter, asking for immediate payment. This is a violation of

    a. no federal law.

    b. the Fair and Accurate Credit Transactions Act.

    c. the Fair Debt Collection Practices Act.

    d. the Truth-in-Lending Act.
    a. no federal law.
  30. A consumer may not be denied credit on the basis of a credit report.

    True

    False
    False
  31. In sales law, a warranty is an assurance by one party of the existence of a fact on which the other party can rely.

    True

    False
    True

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