6.2

Question 1

Misleading or deceptive conduct

Answer 1

Advertisements must not use words that make claims about a product that are not true.

Question 2

Unconsiable conduct

Answer 2

Any business conduct that is unfair or unreasonable

Question 3

Conduct that may mislead the public

Answer 3

Using a brand name similar to a well known brand, or using an Australian made logo when it was made overseas.

Question 4

Bait advertising

Answer 4

Refers to a business attempting to attract customers by advertising some product at low prices, but stocking very few of those products. When the product runs out, customers are directed to products with higher prices.

Question 5

Referral selling

Answer 5

Occurs when a business offers a customer a special deal if they get other potential customers who make a purchase.

Question 6

Contract and agreement…

Answer 6

That a consumer enters must be fair and balanced, written in clear language, not contain any provisions.

Question 7

A consumer has the right to…

Answer 7

Ask for a receipt for any transaction, no matter how small the amount. All transactions over $75 need a receipt.

Question 8

Anyone attempting to sell door to door or over can only do so between…

Answer 8

9am and 6pm on weekdays and from 9am to 5pm on Saturdays. The types of sales are not permitted on Sundays or public holidays.

Question 9

Salesperson must…

Answer 9

Leave immediately if requested and not contact the consumer again for thirty days, with that product.

Question 10

If a consumer agrees to purchase…

Answer 10

They are allowed a ten day cooling off period. Meaning they have the right to cancel the purchase, without paying anything.

Question 11

What is lay-by?

Answer 11

An agreement by which the customer pays a deposit on goods, while the seller hold the item while the consumer pays the balance owing.

Question 12

Lay-by agreements must…

Answer 12

Be in clear writing and easy to understand, and must include all terms and conditions.

Question 13

Businesses that display…

Answer 13

‘no refunds’ signs are breaking the law. If a product is faulty or unfit for it’s purpose a refund must be offered.

Question 14

The consumer will gain…

Answer 14

Clear legal ownership to goods.

Question 15

Goods must…

Answer 15

Match any sample, demonstration model or description given.

Question 16

Goods must be of acceptable…

Answer 16

Quality.

Question 17

Products must be…

Answer 17

Fit for a particular purpose.

Question 18

(something) must be available for available for a reasonable time after sale.

Answer 18

(Repairs and spare parts)

Question 19

Any necessary..

Answer 19

Servicing must be done carefully and in a reasonable time.

Question 20

Whenever you buy goods or services…

Answer 20

You are actually entering a legal binding contract. Even if you don’t buy anything.

Question 21

Repayments must be done when…

Answer 21

Payments have been done using a credit card or borrowing money. Failure to do so can leave the consumer with a poor credit rating.

Question 22

A consumer cannot return goods if…

Answer 22

It has been used other than its original purpose.

Question 23

Price fixing

Answer 23

When 2 businesses agree to set identical prices for their product.

Question 24

Price fixing prevents…

Answer 24

Consumers from taking advantage of genuine competition.

Question 25

Misuse of market power

Answer 25

When a bigger business use their power unfairly to drive smaller competitors out of business.

Question 26

Predatory pricing

Answer 26

This occurs when a business deliberately sets it’s prices at such a low level that it’s competitors cannot match them.

Question 27

Exclusive dealing

Answer 27

This involves 1 business trading with another while imposing restrictions on that other business’s freedom to deal with it’s competitors.

Question 28

Mergers and takeovers

Answer 28

When two or more businesses decide to join together, this is a merger. When one business decides to buy out a competitor, this is a takeover or acquisition.

Question 29

Functions of ACCC

Answer 29

They have the power to investigate possible breaches of the competition and consumer act, and can take legal action against any person or organisation of suspicion.

Question 30

A sole trader is…

Answer 30

A business made by one person.

Question 31

Advantages of a sole trader are…

Answer 31

> owner is the boss
owner keeps all profits
start up costs are low
maximum privacy

Question 32

Disadvantages of sole trader…

Answer 32

> unlimited liability
ability to raise capital funds is limited
owner controls and manages the business
retaining high-calibre employees can be difficult
life of business is limited

Question 33

What is a partnership…

Answer 33

A business that involves a number of people who own the business. It can be owned by 2-20 people.

Question 34

Key aspects of Partnership

Answer 34

> easy and inexpensive to set up
business partners are personally responsible for debts of business
partners control and manage the business

Question 35

Company is…

Answer 35

A separate legal entity. Shareholders have limited liability and must be registered with the ASIC.

Question 36

Key aspects of a company…

Answer 36

> more complex business structure
requires higher set up
business operations controlled by directors and owned by shareholders

Question 37

Franchise…

Answer 37

Are business carried out with authorisation given by another company to carry out specified commercial activites.

Question 38

Cooperatives…

Answer 38

A business which is owned and run jointly by its members.