2 PARTS -PLEASE FOLLOW DIRECTIONS
Short-Answer Essays
- At the end of Chapter 4, read the Experiential Exercise. Go to the Federal Trade Commission’s Web site as your textbook directs you to do. Answer the three questions below in short-answer essay format.
- Your essay must include cited materials from the Federal Trade Commission’s Web site at a minimum. You may use additional resources such as the textbook. Make sure to cite any references you use. Proper citation format for a reference includes the name of the author(s), the title of the work, the date of the publication, and the page number. Be sure to review the grading matrix before you submit your essay.
Essay Questions
Please include the question number you are answering at the beginning of each response.
- 1.Pick one of the press releases from the Federal Trade Commission’s Web site from the last two months to review. What issues are of concern?
- 2.Identify two stakeholders of the press release. Do you do business with any company that might be a stakeholder?
- 3.Is the FTC acting on its role in product safety or some other consumer safeguard?
MULTIPLE CHOICE
1 of 10
What is the main argument presented by proponents of complete deregulation?
| Regulations are simply too confusing. |
| Less government intervention would allow business markets to work more effectively. |
| Regulations hamper competition because they level the playing field. |
| No benefits are received from regulations, only enormous costs. |
| Regulations lower prices to an unfair level that hinders firm profitability. |
Question
2 of 10
What is the purpose of the Federal Trade Commission?
| Protect consumers from unsafe or defective products |
| Regulate the food and drug industry to ensure safe food and drug products |
| Protect consumers and businesses from unfair competition |
| Ensure the accuracy of corporate financial reports |
| Establish fair business standards that companies can choose to adopt |
Question
3 of 10
To generate a measurement of the costs of regulation, economists generally classify regulations as
| safety related or environment related. |
| ethical or legal. |
| standardized or industry specific. |
| state or national. |
| economic or social. |
Question
4 of 10
When weight-loss advertisers made unproven claims about their products, they engaged in
| mergers and acquisitions. |
| price discrimination. |
| tying agreements. |
| exclusive agreements. |
| an unfair method of competition. |
Question
5 of 10
The Pet Food Institute, the Tobacco Institute, and the American Booksellers Association are all examples of
| umbrella organizations. |
| trade associations. |
| special-interest groups. |
| PACs. |
| trade unions. |
Question
6 of 10
Because no government system is perfect,
| legal and regulatory systems are constantly evolving and changing in response to social institutions, including business. |
| the “invisible hand of competition” has replaced many business and economic regulations. |
| companies do not have to worry about meeting every law and regulation, since they are likely to change. |
| self-regulatory mechanisms have created less of a need for government oversight. |
| the costs of business regulation have decreased. |
Question
7 of 10
Which act is the principal tool employed by the federal government to prevent businesses from restraining trade and monopolizing markets?
| Sherman Antitrust Act |
| Clayton Antitrust Act |
| Federal Trade Commission Act |
| Anti-Monopoly Act |
| Roosevelt Antitrust Act |
Question
8 of 10
Administrative spending for federal regulatory agencies, which is used as a measurement of regulatory costs, has
| decreased in recent years as more of the burden of regulation has shifted to the state agencies. |
| increased in recent years because states have been ineffective with their regulations and the burden has shifted to federal agencies. |
| decreased because companies have been much more responsible at self-regulation and less federal spending is needed. |
| increased steadily over the years as the world of business has continued to grow and become more complex. |
| remained relatively steady throughout the past couple of decades. |
Question
9 of 10
What is one major benefit of self-regulation over government regulation?
| Codes of conduct developed by self-regulatory bodies are applicable to all companies in the industry. |
| Self-regulation is usually stricter than government regulation. |
| Self-regulatory bodies provide more employment opportunities than the government. |
| The guidelines developed by self-regulatory bodies tend to be more practical and realistic. |
| Self-regulatory bodies have strong tools to enforce compliance. |
Question
10 of 10
In the United States, the major role that society delegates to government is to
| keep prices of products low so all consumers can purchase convenience and luxury goods. |
| create more jobs. |
| encourage larger companies to conduct business in many other countries. |
| provide laws based on the Constitution and Bill of Rights and enforce those laws through the judicial system. |
| encourage competition by providing economic support to smaller companies in order to be competitive with powerful companies. |
