University of North Dakota

ACCT 315

Chapter 39

1)Direct Sales Corporation sells products to consumers over the phone, through the mail, and online. Under the Federal Trade Commission’s Mail or Telephone Order Merchandise Rule, the firm may be liable for failing to

1. 1. notify consumers when orders are shipped.
   2. provide a cooling-off period of three days before shipping.
   3. all of the choices.
   4. ship orders within the time promised in its ads.

2.Equity Lending Company extends credit to consumers. Equity applies a variety of requirements to determine applicants’ qualifications for credit, the amount, the interest rate, and other terms. Under the Equal Credit Opportunity Act, the lender cannot base its credit decisions on an applicant’s

2. 5. Occupation.
   6. financial awareness.
   7. Credibility.
   8. gender.
3. Consumer Finance Corporation (CFC) extends credit to consumers. CFC applies several criteria to decide customers’ “suitability” for credit. Under the Equal Credit Opportunity Act, CFC cannot base its decision on a customer’s
   1. Intelligence.
   2. Race.
   3. Education.
   4. culture.
4. Consumer Staples Inc. includes in its advertising obvious exaggerations, vague generalities, and puffery about its products. The firm may be subject to sanctions for
   1. the vague generalities.
   2. the puffery.
   3. the obvious exaggerations.
   4. none of the choices.

5. Disposal Company operates a hazardous waste storage facility. Concerned that there may be a release of chemicals from the site, the company sells the property to Eager Developers Inc. If there is a release, the seller is most likely
   1. Liable.
   2. not liable because the site was sold before the release.
   3. not liable because the company no longer operates the facility.
   4. not liable because the company was concerned about the release.
6. Blue Water Power Corporation wants to begin operations that include the discharge of waste into navigable waters. Under the Clean Water Act, Blue Power must install certain equipment
   1. only if a regulatory agency challenges the discharge.
   2. before beginning operations.
   3. with all deliberate speed after beginning operations.
   4. only on a voluntary basis.
7. Ultrahazard Corporation transports radioactive materials. Vince, an Ultrahazard employee, is diagnosed with radiation sickness after exposure to the materials. Vince’s suit against Ultrahazard to recover for the injury is
   1. a nuisance.
   2. an environmental impact statement.
   3. a toxic tort.
   4. a hazardous substance response.
8. Bea borrows funds from Credit Union to repair her home and to buy a car. She buys a laptop from Discount Store in a transacti on financed by the seller. If these parties are subject to the Truth-in-Lending Act, Regulation Z applies to
   1. the car loan, the home repair loan, and the retail installment sale.
   2. the home repair loan only.
   3. the retail installment sale only.
   4. the car loan only.
9. EZ Workout Inc. advertises Fit Step, an exercise machine, online. In its ads, EZ claims that the use of Fit Step measurably enhances the attainability of fitness and weight loss goals, and will contribute significantly to the length of its users’ lives. In this context, the company’s ads and claims must be
   1. Hyperlinked.
   2. all of the choices.
   3. reasonably avoidable.
   4. substantiate
10. Centre City operates its own municipal public drinking water system for which the Environmental Protection Agency has set maximum levels of pollutants. The city does not use any equipment to meet these standards. With regard to any contamination of the water, under the Safe Drinking Water Act, this is most likely
    1. not a violation because water is not a stationary source.
    2. a violation.
    3. not a violation because the city does not use any equipment.
    4. not a violation because the city does not set the standards.
11. The credit department of Mega-Mart often calls Nora at work about an overdue bill over the objection of Nora’s employer. This a violation of
    1. No federal law
    2. The Fair Debt Collection Practices Act
    3. The Fair and Accurate Credit Transactions Act
    4. The Truth-in-Lending Act
12. Noxious Inc. makes and sells pesticides. If a substance is identified as harmful and harm is imminent, the Environment Prote ction Agency can
    1. Order the substance to be sold in an adulterated form
    2. Ignore the risk if the benefit outweighs the harm
    3. Declare the substance to be unregulated and allow its production
    4. Conduct an inspection of the maker’s plant
13. Without a permit, Timberline Plywood Company discharges its untreated wastewater into Urban City’s storm drainage pipes, which empty into Valley Creek. Under the Clean Water Act, this discharge is most likely
    1. Not a violation because water is not a stationary source
    2. A violation
    3. Not a violation because the company does not have a permit
    4. Not a violation because a storm drainage pipe is not a point source
14. Hi-Yield Inc. makes an herbicide with a risk of developing cancer from exposure. This substance must be
    1. Taken off the market and placed in temporary storage
    2. Disposed of before anyone develops cancer
    3. Registered before it is sold
    4. Used only in a way that avoids exposure to people
15. Before being transported, hazardous waste produced by the operations of Fabrication Inc. must be properly labeled and package d under the Resource Conservation and Recovery Act by
    1. The state Environmental Regulatory Commission
    2. The federal Environmental Protection Agency
    3. Fabrication Inc
    4. The local Resource Conservation and Recovery Committee
16. Auto & Life Insurance Company fails to notify its new customers when they are charged higher premium rates as a result of their credit scores. This is a willful violation of
    1. The Equal Credit Opportunity Act
    2. State law, but no federal law
    3. The Fair Credit Reporting Act
    4. The Fair Debt Collection Practices Act
17. Sources of consumer and environmental protection, and the public means to implement and enforce those provisions, exist at the level of
    1. the federal, state, and local governments.