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Chapter 12: Unfair Trade Practices and the Federal Trade Commission
3 problems · 0 figures12-1 §12.AQ source ↗
Define unfair trade practices.
Answer
The term “unfair trade practice” describes the use of deceptive, fraudulent, or unethical methods to gain business advantage or to cause injury to a consumer. Unfair trade practices are considered unlawful under the Consumer Protection Act. The purpose of the law is to ensure that consumers have the opportunity to make informed, rational decisions about the goods and services they purchase.
12-3 §12.AQ source ↗
What is a bait and switch?
Answer
Bait and switch is a form of false advertising whereby the company advertises a product or service and then sells another item in its place.
12-5 §12.AQ source ↗
The following are examples of a company giving misleading price information except:
- a.Advertising “Limited Time Offer” when the offer is available forever.
- b.Advertising “Going Out of Business” when the company plans to stay in business.
- c.Advertising the product as “New” when the product is more than 6 months old.
- d.Advertising “Buy One, Get One” without informing consumers that they must buy another product or service to get the deal.
Answer
C. Advertising the product as “New” when the product is more than 6 months old.
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Problems and answers are adapted from Business Law I Essentials 2e by Mirande Valbrune, Renee De Assis and Suzanne Cardell, OpenStax, and are used under the CC BY-NC-SA 4.0 licence. Access for free at https://openstax.org/books/business-law-i-essentials-2e/pages/1-introduction. Illustrations: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license. This adaptation is released under the same licence, is non-commercial, and is neither affiliated with nor endorsed by OpenStax or Rice University.