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Business Ethics
Q:
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
Q:
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.
Q:
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.
Q:
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.
Q:
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.
Q:
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.
Q:
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.
Q:
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.
Q:
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 structures and construction materials
C.home furnishings and fixtures
D.automobiles
Q:
The primary responsibility for product safety lies with the
A.consumer.
B.government.
C.producer.
D.Consumer Product Safety Commission.
Q:
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.
Q:
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.
Q:
Which of the following is not one of 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.
Q:
The current legal view of "let the seller take care" is
A.caveat vendor.
B.e pluribis unum.
C.norvus ordo seclorum.
D.caveat emptor.
Q:
The legal view of "let the buyer beware" that prevailed in the 1800s was
A.caveat vendor.
B.e pluribus unum.
C.norvus ordo seclorum
D.caveat emptor.
Q:
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.
Q:
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.
Q:
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.
Q:
All of the following are dimensions of quality except
A.features.
B.conformance.
C.serviceability.
D.objectivity.
Q:
Which of the following is not a dimension of quality listed in the textbook?
A.performance
B.durability
C.status
D.aesthetics
Q:
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.
Q:
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.
Q:
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.legislation and regulation
C.an increasingly sophisticated consumer base
D.the threat of product liability lawsuits
Q:
The meaning of product quality is uniform to all.
Q:
A basic premise of Total Quality Management (TQM) is that the product designer is the final judge of quality.
Q:
Business's response to consumerism has consistently been to meet consumers' demands as quickly and effectively as possible.
Q:
Traditionally, the Food and Drug Administration's primary concern has been the "War on Drugs."
Q:
The Food and Drug Administration and the CPSC have been controversial over the decades.
Q:
The Food and Drug Administration grew out of the work of one man.
Q:
The Consumer Product Safety Commission is the only mechanism available for recalling unsafe products.
Q:
The Consumer Product Safety Commission's track record is one of stable operations and results.
Q:
The Consumer Product Safety Commission is an independent laboratory that has power of persuasion only.
Q:
The debate of product liability law will continue until tort reform is passed.
Q:
Market share liability is rarely successful in current product liability lawsuits.
Q:
The standard of absolute liability is less demanding than that of strict liability.
Q:
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.
Q:
The problem of product liability is largely confined to the United States.
Q:
Product liability is a major issue in all countries.
Q:
No matter how careful business is regarding the safety of its products, product liability suites are inevitable.
Q:
The challenge that management faces is to make products as safe as possible for the lowest possible cost.
Q:
Court cases and legal doctrine now make it clear that business is responsible for product safety.
Q:
By definition, quality does not include service.
Q:
The "subjective calculation" for value is a comparison of quality received for the price spent.
Q:
In a survey of households by Walker Research, the top three factors in customers' satisfaction with products were quality, price, and service.
Q:
"Functional foods" are all the following except
A.yogurts that claim to ease constipation
B.butter substitutes that reduce your cholesterol
C.Tomato extracts that keep your skill young and ward off cancer
D.foods that claim to negatively affect your health functioning
Q:
Neuromarketers have concluded that the most effective sounds in terms of psychological appeals include all the following except
A.babies giggling
B.packages being opened
C.vibrating cell phones
D.soda being popped and poured
Q:
Free Press is
A.a coalition of 50 groups fighting product and plot placements.
B.the Federal Communications Commission
C.The Federal Trade Commission.
D.A Consumer Protection Agency.
Q:
Which of the following is not a lesson from the consumer movement?
A.public oversight is needed where corporations lack incentives to regulate their own behavior responsibly.
B.consumers must curb the wasteful overconsumption that threatens the environment.
C.the need to achieve consumerism from one organization to another.
D.Product safety net and consumer protection infrastructure have serious holes.
Q:
The federal government's major body for ensuring that business lives up to its responsibilities is the
A.Interstate Commerce Commission.
B.Federal Communications Commission.
C.Federal Trade Commission.
D.Consumer Protection Agency.
Q:
Which of the following is not a law that addresses information disclosure issues?
A.Equal Credit Opportunity Act
B.Credit Collection Limitation Act
C.Truth-in-Lending Act
D.Fair Credit Reporting Act
Q:
The Federal Packaging and Labeling Act of 1967 is administered by the
A.Federal Trade Commission.
B.Consumer Products Council.
C.Interstate Commerce Commission.
D.Federal Drug Administration.
Q:
The purpose of the Federal Packaging and Labeling Act of 1967 was to
A.prohibit deceptive labeling of certain consumer products.
B.require disclosure of certain important information.
C.limit both the type and amount of material used in packaging.
D.both prohibit deceptive labeling of certain consumer products and require disclosure of certain important information.
Q:
A guarantee that is explicitly offered at the time of sale is called a(n)
A.implicit warranty.
B.express warranty.
C.traditional warranty.
D.extended warranty.
Q:
An implied warranty is
A.available for all new and used products.
B.an unspoken promise that there is nothing significantly wrong with the product.
C.limited to one year.
D.states exactly what is covered and what is not.
Q:
The traditional term that was used for advertising located in novel locations (now called ad creep) was
A.ambiguous advertising.
B.stealth marketing.
C.ambient advertising.
D.undercover promotion.
Q:
Warranties were originally used by manufacturers to
A.help sell their products.
B.differentiate their products from those of competitors.
C.improve the image of their products.
D.limit the length of time they were responsible for products.
Q:
The fact that advertising can increasingly be found everywhere is referred to as
A.the consumer culture.
B.expanding markets.
C.ad creep.
D.evolutionary marketing.
Q:
All of the following are significant issues in cigarette advertising except
A.promotion of a dangerous product.
B.its aim at young audiences.
C.its aim at less-educated consumer markets.
D.its aim at less-developed countries.
Q:
The industry under the greatest attack for its marketing and advertising practices is
A.pharmaceuticals.
B.liquor.
C.automobiles.
D.cigarettes.
Q:
The basic activity of CARU is
A.nominating exceptional children's advertising for national awards.
B.to develop guidelines for effective advertising to children.
C.to review and evaluate child-directed advertising in all media.
D.monitor new developments in ads directed toward children.
Q:
CARU would object to tobacco ads directed toward children as a violation of which of its principles?
A.do not exploit the imagination of young children
B.products that are inappropriate for use by children should not be advertised to them
C.develop advertising that addresses itself to positive social behavior
D.incorporate minority and other groups in advertisements
Q:
Which of the following is not part of CARU's guidelines for advertising directed toward children under the age of twelve?
A.take into account the maturity, knowledge, and sophistication of the audience
B.do not exploit the imaginations of young children
C.incorporate minority and other groups into the advertising
D.consider the socioeconomic level of the audience
Q:
The Children's Television Act was passed to
A.prevent violent shows from being broadcast during morning hours.
B.prohibit the airing of commercials about products or characters during a show about those products or characters.
C.regulate the plotlines of children's shows.
D.limit the number of hours children could watch television.
Q:
The fact that Abercrombie and Fitch terminated its sexually explicit catalogue is evidence that
A.the Christian right is changing American values.
B.the feminist movement is an active force in advertising.
C.sex does not necessarily sell.
D.consumers are more interested in clothing than in sex.
Q:
The practice of directly contrasting a firm's product with the product of a competitor is called
A.comparative advertising.
B.puffery.
C.the taste test approach.
D.denigration.
Q:
Advertising that is designed to persuade on the basis of human emotions and emotional needs rather than reason relies on
A.puffery.
B.concealed facts.
C.ambiguous wording.
D.psychological appeals.
Q:
Which of the following is not a problem associated with exaggerated claims?
A.They induce people to buy things that do them no good.
B.They drive out good advertising.
C.They generally cost more to produce.
D.They result in a loss of advertising efficiency.
Q:
Puffery is another way of saying that a statement is an exaggeration that uses
A.general superlatives.
B.ambiguous praise.
C.vague commendations.
D.special terminology.
Q:
Advertising claims that cannot be substantiated by evidence are termed
A.misleading.
B.outlandish.
C.understatements.
D.exaggerated claims.
Q:
Use of plot placements involve
A.awards given for extraordinarily poor advertisements.
B.advertising ideas taken from the storylines of books or movies.
C.placement of products part of the storyline of a television show.
D.ideas for new products taken from books.
Q:
Words that are inherently vague, without being misleading are referred to as
A.weasel words.
B.mildly deceptive.
C.perceptively ambiguous.
D.intentionally ambivalent.
Q:
Advertising abuses include all of the following types except
A.ambiguity.
B.concealed facts.
C.psychological appeals.
D.cynical depictions.
Q:
Information that provides potential purchasers with enough information to make the best choice among the options available is
A.adequate.
B.ambivalent.
C.minimal.
D.realistic.
Q:
Information that communicates truths, and avoids exaggeration and innuendo is
A.adequate.
B.accurate.
C.ascetic.
D.antithetical.
Q:
Information that is direct and straightforward, that is not deceptive or manipulative is
A.clear.
B.concise.
C.convincing.
D.creative.
Q:
Which of the following is not a commonly recognized benefit of advertising?
A.It stimulates competition.
B.It provides information useful in comparison shopping.
C.It provides competitors with information.
D.It lowers the price of goods and services.
Q:
Issues related to product information include all of the following except
A.advertising.
B.warranties.
C.labeling.
D.website design.
Q:
The two major classifications of issues in the business/consumer relationship are
A.cost and safety.
B.product information and the product itself.
C.warranties and advertising.
D.customer service and product safety.
Q:
The power held by consumers comes from
A.umbrella organizations.
B.trade associations.
C.company lobbying.
D.grassroots involvement.
Q:
Common consumer complaints include all of the following except
A.poor quality of products.
B.lack of consumer credit.
C.high prices.
D.misleading packaging or labeling.