Chapter 6

Question 1

Which of the following represents an argument for the market approach to consumer protection?

-More demands for safety means government should not have to interfere.
-Sellers will provide safety even if consumers do not demand it.
-More demand for safety encourages more safety.
-Government intervention makes the market fair, efficient, and less coercive.

Answer 1

More demand for safety encourages more safety

Question 2

Which of the following is a common problem with the market approach to consumer protection?

-Consumers are often not rational about product risk or probabilities.
-Consumers have too much information and won’t take time to understand it.
-Government has made excess information too inexpensive and easy to find.
-Consumers expect the government to monitor all aspects of safety.

Answer 2

Consumers are often not rational about product risk or probabilities

Question 3

Which of the following is based on the idea that consumers and sellers are not equals in the transactional relationship?

The doctrine of caveat emptor
-The Uniform Commercial Code
-The social costs view
-The due-care view

Answer 3

The due-care view

Question 4

Which implied claim refers to the estimated amount of time a product will function as effectively as a consumer is led to believe it will?

-Reliability
-Service life
-Maintainability
-Product safety

Answer 4

Service life

Question 5

Which of the following is the basis for the social cost view?

-Caveat vendor
-Cramming
-Coercion
-Caveat emptor

Answer 5

Caveat vendor

Question 6

How can a manufacturer practice due care in the production and manufacturing process?

-Determine the mental capacities of all persons who will use the product.
-Ensure compromises are not made that will affect the safety of the final product.
-Test the product under a variety of conditions with a variety of materials.
-Determine the effects of aging and wear based on product design.

Answer 6

Ensure compromises are not made that will affect the safety of the final product

Question 7

Which of the following are the costs of the resources consumed in producing or improving a product?

-Selling costs
-Production costs
-Social effects costs
-Materialistic value

Answer 7

Production costs

Question 8

According to the contractual view of the business firm’s duties to its customers, what is created by the contractual relationship between a firm and its customers?

-Universalized contracts
-Moral duties
-Social rules
-Secondary duties

Answer 8

Moral duties

Question 9

Which of the following is one of the main objections to the contractual view of a business firm’s duties to its customers?

-The use of indirect agreements that cover implied warranties
-The idea that buyers and sellers are equals in the transaction
-The assumption that sellers deal directly with buyers
-The enforcement of the doctrine of caveat emptor

Answer 9

The assumption that sellers deal directly with buyers

Question 10

Which of the following describes an enabling function of privacy?

-Privacy helps to keep potentially embarrassing information private.
-Privacy helps individuals to sustain distinct social roles.
-Privacy helps protect individual rights based on values others may not hold.
-Privacy helps individuals from involuntarily harming their own reputation.

Answer 10

Privacy helps individuals to sustain distinct social roles

Question 11

The most basic moral duty of a business is to provide customers with a product or service that lives up to all claims made about that product or service by the business. This is referred to as a(n)

-undue influence
-secondary duty
-express warranty
-service life

Answer 11

express warranty

Question 12

Which of the following represents a major fault in the due-care view of moral responsibility?

-It places the cost for unforeseen product injuries in the hands of the manufacturer.
-It requires the consumers to use products in a way that minimizes risk of injury or harm.
-It requires the manufacturer to determine how much risk is acceptable for the consumer.
-It identifies specific formulas to determine the levels of due care required for each product.

Answer 12

It requires the manufacturer to determine how much risk is acceptable for the consumer

Question 13

Which of the following unethical practices occurs when consumers are signed up and billed for third-party services without their knowledge or consent?

-Fraud and deception
-Due care
-COercion
-Cramming

Answer 13

Cramming

Question 14

In terms of product safety, what is the potential result of government intervention in consumer markets?

-Safety is reduced to a commodity that must be provided even if unwanted.
-Markets become unfair, inefficient, and coercive.
-The government bears the added cost of incorporating safety.
-Consumers will pay extra for safety if sellers provide it.

Answer 14

Markets become unfair, inefficient, and coercive

Question 15

Under the due-care view of moral responsibility, why do manufacturers have a greater duty to take care to ensure that consumers’ interests are not harmed by the products they offer?

-Manufacturers have greater knowledge and expertise that consumers lack.
-There is a strong bond of trust between consumers and manufacturers.
-Consumers have less time to adequately research goods and services before purchase decisions.
-Manufacturers have more time to consider the needs of each consumer and how they will use a product or service.

Answer 15

Manufacturers have greater knowledge and expertise that consumers lack

Question 16

Which of the following views of the manufacturers’ duties to consumers holds that the manufacturer should pay the cost of injuries sustained through defects in the product, even when due care has been exercised?

The due-care view of business responsibility
-The contractual view of manufacturers’ responsibilities
-The duty of disclosure
-The social costs view of the manufacturers’ duties

Answer 16

The social costs view of the manufacturers’ duties

Question 17

Which of the following views supports the idea that when consumers use products in a manner that is careless, and then become injured, the responsibility is on the consumer, not the manufacturer?

-Contracual
-Due-care
-Social cost
-Irrational purchases

Answer 17

Contractual

Question 18

Which of the following describes the reason physical privacy is as important as psychological privacy.

-Inner lives cannot be intruded upon by other individuals.
-Individuals have the moral right to substantial interests in things.
-Inner lives are revealed by physical activities and expressions.
-Revealing private information is an invasion of the physical person.

Answer 18

Inner lives are revealed by physical activities and expressions

Question 19

Which of the following ethical factors are being evaluated when we look at an advertisement’s ability to inform or persuade a consumer?

-Effects on belief
-Materialistic values
-Effects on desire
-Social effects

Answer 19

Effects on desires

Question 20

Which of the following best describes the implied value of the function of commercial advertising?

-To provide unbiased information to the consumer
-To distinguish a mass audience from a private, more specific audience
-To provide objective information to the consumer
-To sell a product to the consumer

Answer 20

To sell a product to the consumer

Question 21

Which of the following criticisms of the social cost view supports the idea that the social cost view is unjust?

-The social cost view assumes that being required to pay for the cost of injuries will inspire manufacturers to reduce the number of accidents.
-The social cost view requires manufacturers to pay for unforeseeable and unpreventable injuries.
-The social cost view has increased the number of lawsuits under the strict liability claim.
-The social cost view does not consider the standard utilitarian assumptions about the values of efficiency.

Answer 21

The social costs view requires manufacturers to pay for unforeseeable and unpreventable injuries

Question 22

Which of the following is a claim made by critics of the social costs view based on the idea that an increase in consumer carelessness will lead to an increase in consumer injuries?

-The social cost view is unjust.
-The social cost view places undue burdens on manufacturers.
-The social cost view is based on incorrect assumptions
-The social costs view places undue burdens on insurance carriers

Answer 22

The social cost view is based on incorrect assumptions