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Exam 15: Product Liability and Consumer Protection

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Question 21

True/False

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A child is injured after swallowing a piece of glass hidden in a jar of jam.A court will award money for the injuries based on strict product liability: the piece of glass was a careless action that was both the actual and the proximate cause of the victim's injury.

A) True
B) False

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Question 22

Multiple Choice

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David went to the store to purchase a $15 MP3 player,advertised in the paper.The salesperson was encouraged by the store not to sell that MP3 player since it created a loss for the store.Instead,the salesperson told David that although the MP3 player was on sale,it was an undesirable,bottom-of-the-line product,and that David would be much happier with an Apple iPod Nano CD player for $250.The store:

A) acted in good faith when it tried to offer a better product.
B) can be sued under the policy of negligence and strict liability.
C) can be held guilty of a bait-and-switch scheme.
D) can be held guilty of fraudulent misrepresentation.

E) None of the above
F) A) and B)

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Question 23

Multiple Choice

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A knife made by Knife Co.has a metal handle with no warning,and the manufacturer has received reports that some consumers have received electrical shocks when attempting to use the knife as a screwdriver while installing an electrical outlet.Athena is one such consumer and decides to sue the manufacturer and the seller.Which of the following is true of this situation?

Jackson Motors tells Sue,a consumer,that Bliss Automobiles are made with metal bodies when they are in fact made of fiberglass.This would be considered a(n) :

Xena's 1998 car's odometer stops working,and she does not repair it for six months because she is out of the country on business.Her family members drive her car while she is away.Xena is preparing to sell her car and honestly does not know the precise mileage on the car.Discuss what actions the law requires her to take after repairing the odometer while selling her car.

The Federal Trade Commission defines a "dealer" as anyone who sells more than five (5)used cars in a 12-month period.The law covers the sale of automobiles,light-duty vans,and light-duty trucks.

Which of the following is true of public interest and public policy?

Which of the following entities are allowed to send merchandise through the mail to people who did not order it?

The FTC's "Cooling-Off" Rule applies to sales that are entered completely by phone or by mail.

Local business activity carried on within state boundaries is known as:

Cristina receives a new credit card from Seventh National Bank that does not provide a means for a retailer to verify that the holder of the card is in fact authorized to use it.The next day,Cristina discovers that she has lost her card.As soon as she discovers the card is missing,she calls Seventh National to report the loss.Already,$620 worth of unauthorized charges have been made on her credit card.Under the Truth-in-Lending Act,Cristina will:

Jarvis rents an apartment for a period of two months.His lease is governed by the Consumer Leasing Act.

Roberts bought a new ride-on lawn mower and allowed his son,Don,to be the first person to drive it.Due to a factory defect,the mower's gearshift stuck in reverse.Don was seriously injured when the mower backed into a ditch and tipped over.When Don sued the manufacturer for his injuries,the manufacturer argued that it was not liable because Don had not purchased the mower.Is Don likely to win his case? Why or why not?

Which of the following is not a requirement for strict product liability?

A 900 telephone number bills the vendor for the telephone charge.

If the seller of an automobile believes that the mileage reading on the odometer is incorrect,the disclosure statement must indicate that the actual mileage is unknown.

Under the ________,sellers must ship orders within the time promised in their advertisements.If no time period is promised,sellers must either ship the order within 30 days or send the consumer an option notice.

The ________ is an attempt by the federal government to reduce the use of unsolicited commercial e-mails on the Internet.

The APR is calculated by consumers with tables provided by the Federal Trade Commission.

Mary contracts to lease an automobile from Zippo Sales with payments of $300 per month for a year and a final balloon payment of $1,200.This final payment is: