Question 1
The Merrell drug company that tried to bring thalidomide to the United States also marketed a cholesterol inhibitor with serious side effects for 5,000 people. Two Merrell employees were fined $80,000 and the company made an $18 million profit. What had the company done wrong?
A. Substituted the results for a tested drug for an untested drug
B. Forged signatures on test reports
C. Failed to disclose that the drug caused blindness in lab animals
D. Testified that testing had been done when it had not
Question 2
A criticism of the caveat emptor doctrine is:
A. too much government regulation.
B. reduced profit for businesses.
C. it hurts consumers by raising prices.
D. latent defects.
Question 3
Some of the worst con artists practice their craft based on meteorological events. These are known as ________ con artists.
A. event
B. disaster
C. weather
D. special occasion
Question 4
The term laissez faire refers to the concept that:
A. governments should not interfere with free markets.
B. consumers should be protected from fraud artists.
C. buyers should be aware of offers that sound too good to be true.
D. marketers should be fair to consumers.
Question 5
The following companies have all been accused of fraud involving car problems and possible solutions EXCEPT:
A. Ford.
B. Kmart.
C. Goodyear.
D. Firestone.
Question 6
The telemarketing scam which relies on use of a certain area code to make money just from phone calls is _____ calls.
A. 777
B. 900
C. 666
D. 888
Question 7
The Food and Drug Administration has cited evidence that nicotine is an addictive drug 5 to 10 times more potent than:
A. cocaine.
B. crack.
C. heroin.
D. marijuana.
Question 8
Telemarketers target all of the following groups EXCEPT:
A. family members of AIDS victims.
B. the bereaved.
C. those worried about dependence on foreign oil.
D. college students living away from home for the first time.
Question 9
Ford decided that repairs would not be cost effective, based on a comparison of total repair costs for all Pintos and:
A. statistical likelihood of plaintiffs winning lawsuits.
B. profit margin for the Pinto automobile.
C. total of Pinto projected sales.
D. total of average lawsuit settlements for serious burn injuries and burn deaths.
Question 10
Tobacco companies have used specific marketing campaigns with flavored cigarettes, new packages, and posters at fast food restaurants to target:
A. Hispanics.
B. African Americans.
C. women.
D. teenagers.
Question 11
A boiler room might be characterized by:
A. telephones.
B. well-dressed salesmen.
C. support personnel.
D. fancy furniture.
Question 12
In 1999, Susan Collins described the predatory practices of sweepstakes companies as “increasingly deceptive and increasingly aggressive.” She made these remarks:
A. as chairman of a Senate committee.
B. during a television news magazine segment.
C. in testimony before a Congressional committee.
D. in a nationally syndicated newspaper column.
Question 13
Despite inadequate testing, H.R. Robins marketed __________, which caused death, birth defects, miscarriages, and blindness in infants.
A. the intrauterine birth control device
B. the diaphragm
C. birth control pills
D. the birth control patch
Question 14
Fen-phen, Bendectin, and thalidomide were all approved by the FDA and prescribed to patients. Which one of these drugs is alleged to cause valvular heart disease?
A. Thalidomide
B. Bendectin and thalidomide
C. Bendectin
D. Fen-phen
Question 15
American Family Publishers used all of the following techniques to trick entrants EXCEPT:
A. free merchandise.
B. small print.
C. YOU’RE OUR NEWEST $12 MILLION WINNER.
D. backgrounds that made print difficult to read.
Question 16
A practice known as dumping involves:
A. disposal of hazardous materials in unapproved sites.
B. selling dangerous products in foreign countries after a domestic ban.
C. donating unsafe products to charities for a tax deduction.
D. selling products to discount outlets when defects are discovered.
Question 17
Five to 10% of all minutes logged on the telephone time scams are concentrated in:
A. psychic hotlines.
B. music sales.
C. work-at-home offers.
D. sex lines.
Question 18
Pursuant to an agreement, American Family Publishers agreed to eliminate which slogan from its advertising:
A. “Win! Win! Win!”
B. No Purchase Necessary
C. “Millions in Prizes!”
D. “You’re Our Next Winner!”
Question 19
The number one consumer complaint concerning fraud involves:
A. refinance loans.
B. home improvement.
C. auto repair.
D. telemarketing.
Question 20
__________ of the most dangerous problems that led to recalls of children’s products were never voluntarily reported to the government.
A. 75%
B. 60%
C. 50%
D. 25%
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