California State University, Northridge » Philosophy » Philosophy 305 - Business Ethics » Fall 2022

Philosophy 305 - Business Ethics » Fall 2022 » Chapter 6 Consumers

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Question #1

Subliminal advertising is advertising that supposedly communicates at a level beneath our conscious awareness.

A. False

B. True

Question #2

Due care is 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 knowledge and expertise the consumer does not have.

A. True

B. False

Question #3

The terms “best, finest, and most” are examples of

A. trust building statements.

B. psychological appeals.

C. truth in advertising.

D. puffery.

Question #4

To properly protect consumers,

A. tests of a product can safely assume that the product will be used in just the way that the manufacturer intends it to be used.

B. if a product poses a potential, serious threat, a company may need to take extraordinary measures to ensure continued safe use of it.

C. manufacturers of a product can legitimately assume that accidents occur exclusively as a result of product misuse.

D. only new products, not established products, need to be tested.

Question #5

In his books The Affluent Society and The New Industrial State, John Kenneth Galbraith argues that consumer wants determine what gets produced.

A. False

B. True

Question #6

Due care is

A. the idea that consumers and sellers do not meet as equals and that consumer's interests are particularly vulnerable to being harmed by the manufacturer.

B. based on the principle of absolute liability.

C. based on the principle of caveat emptor.

D. based on the principle "let the buyer beware".

Question #7

Strict product liability is the doctrine that the seller of a product has legal responsibilities to compensate the user of that product for injuries suffered due to a defective aspect of the product, even though the seller has not been negligent in permitting that defect to occur.

A. True

B. False

Question #8

In 1972 Congress created one of the most important agencies for regulating product safety. This agency is the

A. Consumer Product Safety Commission.

B. Fair Packaging and Labeling Commission.

C. Securities and Exchange Commission.

D. Federal Drug Administration Agency.

Question #9

The media with the greatest advertising influence over children is

A. Internet.

B. radio.

C. magazines.

D. television.

Question #10

According to the legal doctrine of strict product liability,

A. product liability presupposes negligence by more than one party.

B. the producer of a product is never responsible for any injury the consumer suffers.

C. consumers must assume all risk whenever they buy a product.

D. a manufacturer need not be negligent to be held liable for a defective product.

Question #11

Defenders of advertising claim that, despite criticisms, advertising enjoys protection under the first Amendment as a form of speech.

A. False

B. True

Question #12

Legal paternalism is the doctrine that the law

A. should only restrict people's freedom in order to protect other people.

B. should encourage business to develop a paternal sense of responsibility for consumers.

C. may justifiably be used to restrict the freedom of individuals for their own good.

D. may justifiably forbid lawsuits against those who act paternalistically.

Question #13

The case of FTC v. Standard Education was important in the legal transition

A. away from the reasonable-person standard.

B. toward the reasonable-person standard.

C. toward the principle of caveat emptor.

D. that removed power from the Federal Trade Commission (FTC).

Question #14

Anti-paternalism gains plausibility from the view that individuals know their own interests better than anyone else and that they are fully informed and able to advance those interests.

A. True

B. False

Question #15

The consumer’s main source of product information is typically:

A. billboards.

B. testimonials of other customers.

C. word of mouth.

D. the label and package.

Question #16

Harvard business professor Theodore Levitt has

A. invented the concept of "puffery".

B. argued that the process of production today creates the very wants it then satisfies.

C. drawn an analogy between advertising and art.

D. proven the possibility of effective subliminal advertising.

Question #17

"Weasel words" are words used to evade or retreat from a direct or forthright statement.

A. False

B. True

Question #18

Critics of advertising contend that

A. restrictions on advertising violate the moral rights of advertisers.

B. advertising can only influence us if we want it to.

C. advertising rarely gives consumers much useful information.

D. brand loyalty increases price competition.

Question #19

Which of the following is an example of price gouging?

A. having to pay above the seller's original asking price for a home

B. increasing the price of lawn movers in the spring and summer

C. a New York hotel tripling its room prices after 9/11

D. selling World Series Tickets for $300

Question #20

The doctrine of caveat emptor means that the law may be justifiably used to restrict the freedom of individuals for their own good.

A. True

B. False

Question #21

The Fair Packaging and Labeling Act of 1966 empowers representative agencies to rank and list all ingredients in the order of decreasing percentage of total contents.

A. False

B. True

Question #22

The controversy over legal paternalism pits the values of individual freedom and autonomy against social welfare.

A. True

B. False

Question #23

People generally speak of two kinds of warranties. What are these two kinds of warranties?

A. legal and moral

B. limited and unlimited

C. positive and negative

D. express and implied

Question #24

In deciding whether an ad is deceptive, today the FTC basically follows

A. the "modified" gullible-consumer standard.

B. the gullible consumer standard.

C. the reasonable consumer standard.

D. none of these choices.

Question #25

Legal paternalism is the doctrine that the law should not be used to restrict the freedom of individuals for their own good.

A. True

B. False

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