TBChap 020

Chapter 20
Marketing Regulation and Consumer Behavior
Multiple Choice Questions

1. Government regulatory bodies _____.
A.
B.
C.
include the FDA and USDA

have increased consumer satisfaction with counterfeit goods
ensure the safety of counterfeit consumer goods
D. require manufacturers of branded goods to reimburse consumers who find they have gotten a
counterfeit version
E.
all of the above
2. Which of the following statements is FALSE regarding marketing practices?
A.
Marketing practices are sometimes controversial.
B. Regulating marketing activities requires a higher level of understanding of consumer behavior

than does managing marketing programs.
C. There are many issues where the appropriate ethical action for marketers is not clear-cut.
D. Society has declared that some marketing actions are clearly inappropriate.
E. There are laws and regulations that prohibit or require specific marketing actions.
3. The regulation of marketing activities aimed at children focuses primarily on which of the
following?
A.
product safety
B.
advertising
C.
promotion
D.
privacy protection
E.
all of the above
20-1
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McGraw-Hill Education.
4. One basis for the concern over marketing to children is based on _____.
A.
B.
C.
D.
E.
attribution theory
Piaget's stages of cognitive development
the multiattribute model of cognitive development
dissonance theory
mental development theory
5. The food industry has responded to concerns regarding children's health by
A.
providing healthier meal options for kids.
B. removing diet sodas and replacing them with diet and other healthier drinks on menus.
C. committing to advertising healthy dietary choices to children under 12.
D.
E.
A and B
all of the above
6. According to Piaget's stages of cognitive development, children lack the ability to fully process
and understand information, including marketing messages, until around age _____.
A.
B.
C.
D.
E.
8
10
12
15
7. What is the oldest age of a child that most regulation attempts to protect with respect to marketing
practices?
A.
B.
C.
D.
E.
10
12
20-2
8. Conor is 15 years old. Which of the following statements is TRUE regarding him and other
children his age?
A. He most likely still lacks the ability to fully process and understand information, including
marketing messages.
B. Most marketing programs aimed at him deliberately attempt to exploit him.
C. He most likely has the ability to fully process and understand information, including marketing
messages.
D. While he has the ability to process information, he does not yet have the ability to understand
the information.
E. Most regulation regarding marketing to children includes him.
9. Which of the following is the American advertising industry's primary self-regulatory body?
A.
Federal Trade Commission
B. National Advertising Division of the Council of Better Business Bureaus

C.
D.
E.
Food and Drug Administration

Congress
media
10. Which of the following is a special unit of the National Advertising Division of the Council of Better
Business Bureaus that specifically reviews advertising aimed at children?
A.
Children's Advertising Review Unit (CARU)
B.
National Advertising Review Board (NARB)
C.
National Children's Advertising Division (NCAD)
D.
National Children's Advertising Review Board (NCARB)
E.
Federal Trade Commission (FTC)
11. Margaret wants to complain about an advertisement targeting children that she saw on a program
her children were watching. Which self-regulatory organization should she contact?
A.
B.
C.
D.
E.
20-3
12. How many of the CARU's general guiding principles relate to a child's ability to comprehend
commercial messages?
A.
B.
C.
D.
E.
6
all of them
13. Which of the following is NOT an information-processing-related guideline of the CARU?
A.
Claims should not unduly exploit a child's imagination.
B. Ads should demonstrate the performance and use of the product in a way that can be
duplicated by the child for whom the product is intended.
C. Representation of food products should be made so as to encourage sound use of the product
with a view toward healthy development of the child and development of good nutritional
practices.
D. Program personalities, live or animated, should not be used to sell products, premiums, or
services in or adjacent to programs primarily directed to children under 12 years of age in
which the same personality or character appears.
E. All disclosures and disclaimers material to children should be understandable to the children in
the intended audience and account for their limited vocabulary and language skills.
14. Piaget's theory of cognitive development holds that _____.
A.
B.
children must be taught how to be consumers

marketing stimuli play a critical role in child socialization
C. intellectual capabilities can continue to expand throughout the lifecycle

D. intellectual capabilities continue to expand until late middle age
E.
none of the above
20-4
15. When Rose Art Industries changed its packaging due to concerns that size of the product relative
to the size of the child shown on the package picture could lead a child to believe that the Super
Lite toy was larger than it was, this is related to _____.
A. CARU's guidelines linked to possible information-processing deficits of children

B. CARU's guidelines linked to concerns about the health/safety/value effects of commercial
messages on children
C. COPPA's guidelines regarding processing deficits of children
D.
all of the above
E.
none of the above
16. CARU and others are interested in the impact that the _____ of children's advertising has, as well
as the ability of children to process advertising messages.
A.
B.
C.
content
quantity
quality
D.
E.
tone
all of the above
17. What is the concern regarding the limited ability of children to comprehend advertising
messages?
A.
Do children understand the selling intend of commercials?
B.
Can children understand specific aspects of commercials?
C.
D.
E.
Do children like commercials?

A and B
A, B, and C
18. Cathy was babysitting her two nieces on a Saturday morning, and they were watching cartoons
together. She noticed that every time a commercial pod came on, there was a little jingle telling
the kids that "after these messages, we'll be right back." This is an example of _____.
A.
a discriminator
B.
a warning
C.
a separator
D.
E.
a primer
corrective advertising
20-5
19. "Part of a nutritious breakfast," "Each sold separately," and "Batteries not included" are examples
of _____.
A.
B.
C.
D.
E.
disclaimers
primers
warning labels
deception
20. Which of the following is(are) a major area of concern regarding the large amount of time children
devote to watching television?
A.
the impact of commercial messages on children's values
B. the impact of commercial messages on children's health and safety

C.
D.
E.
the impact of commercial messages on children's education

A and B
A, B, and C
21. How many of CARU's basic principles focus on the concern regarding the impact of commercial
messages on children's values and their health and safety?
A.
B.
C.
D.
E.
4
5
20-6
22. Which of the following CARU principles addresses the impact of commercial messages on
children's values and their health and safety?
A. Although there are many influences that affect a child's personal and social development, it
remains the prime responsibility of the parents to provide guidance for children. Advertisers
should contribute to this parent-child relationship in a constructive manner.
B. Advertisers are encouraged to capitalize on the potential of advertising to serve an educational
role and influence positive personal qualities and behaviors in children.
C. Advertisers should avoid social stereotyping and appeals to prejudice and are encouraged to
incorporate minority and other groups in ads and to present positive role models whenever
possible.
D. Products and content which are inappropriate for children should not be advertised or
promoted directly to them.
E. All of the above address the impact of messages on children's values and their health and
safety.
23. Which of the following statements regarding marketing and children's health and safety is
FALSE?
A. Ensuring that advertisements portray only safe uses of products is sometimes difficult, and it is
a controversial area.
B. Even ads clearly not targeting children can have potentially harmful consequences.
C. In many instances, children and teenagers are exposed to advertising directed at adults.
D. Advertising of health-related products, particularly snack foods and cereals, is controversial.
E. Advertising sugared products such as presweetened breakfast cereals does increase their
consumption.
24. Cindy is bothered about the amount of advertising her 10-year-old daughter sees for cosmetics
and designer clothes that she feels are too suggestive in nature. Which is Cindy's major area of
concern regarding advertising to children?
A.

C.
the impact of commercial messages on the economy
D. the impact of commercial messages on her children's cognitive development

E.
the impact of commercial messages on her budget
20-7
25. Hale noticed in a commercial that his children were watching that children riding bikes were
shown not wearing a helmet. He always makes his children wear helmets while riding their bikes,
but he's concerned about other children seeing this ad and thinking it's okay to not wear one.
What is Hale's major area of concern regarding advertising to children?
A.

C.
D. the impact of commercial messages on childrens cognitive development

E.
the impact of commercial messages on family's budgets
26. Advertising is frequently criticized for fostering which type of values in children?
A.
B.
C.
D.
E.
overly materialistic
self-focused
short-term
A and B
A, B, and C
27. Estimates of the number of TV ads that children are exposed to per year range from _____.
A.
1,000 to 5,000
B.
8,500 to 15,000
C.
18,000 to 40,000
D.
48,000 to 60,000
E.
73,000 to 100,000
28. CARU reviews thousands of ads every year and has a(n) _____ success rate in resolving issues
related to children's advertising.
A.
10 percent
B.
25 percent
C.
50 percent
D.
E.
80 percent
over 95 percent
20-8
29. Which of the following is a marketing activity targeted at children that is considered controversial?
A.
B.
C.
D.
E.
violent entertainment products

kids' clubs
mobile marketing
commercialization in schools
all of the above
30. Which of the following is referred to as the "Third Screen"?
A.
television
B.
computer
C.
D.
video games
cell phone
E.
iPod
31. Ringtones, mobile games, and text-in contests are various types of promotional efforts regarding
which controversial marketing activity aimed at children?
A.
B.
kids' clubs
C.
mobile marketing
D.
E.
commercialization of schools
Internet marketing
32. A soft-drink manufacturer is running a promotion in which consumers text message from their cell
phone a code that they can find under the bottle cap. Consumers entering can win various prizes.
This is an example of which type of marketing activity aimed at children that is considered
controversial?
A.
B.
kids' clubs
C.
mobile marketing
D.
E.
Internet marketing
20-9
33. If consumers call a specific number, they can access games on their cell phones. The games
usually involve a branded product or an event, such as the release of a movie. This is an example
of which type of marketing activity aimed at children that is considered controversial?
A.
B.
kids' clubs
C.
mobile marketing
D.
E.
Internet marketing
34. Scott participated in a promotion that allowed him to download a ringtone for his cell phone that
played the Stars Wars theme song. This is an example of which type of marketing activity aimed
at children that is considered controversial?
A.
B.
kids' clubs
C.
mobile marketing
D.
E.
Internet marketing
35. Which of the following is a classification of commercialization of schools?
A.
B.
in-school ads
ads in classrooms
C.
corporate-sponsored educational materials and programs
D.
corporate-sponsored contests and incentive programs
E.
all of the above
36. Which of the following is NOT a classification of commercialization of schools?
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
20-10
37. Ads in such places as school buses, scoreboards, and bulletin boards, as well as coupons and
free samples, represent which of the following?
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
38. At Marci's school, there are logos for McDonald's, Coca-Cola, and Sprint around the football
stadium's scoreboard. She was also given pencils that had Gap written on them and a notebook
with the Nike swoosh. These are examples of _____.
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
39. Channel One is an example of _____.
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
40. Corporate-sponsored educational materials and programs are also called _____.
A.
B.
propaganda programs (PPs)

biased educational materials (BEMs)
C.
sponsored educational materials (SEMs)
D.
commercial educational materials (CEMs)
E.
marketing educational materials (MEMs)
20-11
41. Which of the following are teaching materials provided by corporations, usually for free, that come
in various forms, including posters, activity sheets, and multimedia teaching aids?
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
42. Marilyn is a recent college graduate teaching junior high school science. She has several courses
she has to prepare, so she was very pleased when Alcoa Corporation provided her with a
teaching unit on recycling. This teaching unit is an example of _____.
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
43. The fourth grade class at Westview Elementary School won $10,000 for their school's music
program because they entered a contest sponsored by Oscar Mayer bologna in which they sang
the famous jingle for that brand (i.e., "my bologna has a first name, it's O-S-C-A-R....") and won it
for their state. This is an example of _____.
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
44. What is a major concern that has emerged regarding Internet marketing and children?
A.
invading children's privacy
B. exploitation of children through manipulative sales techniques

C.
D.
E.
inappropriate pop-up ads

A and B
A, B, and C
20-12
45. James is 12 years old and likes to play games on the Internet, and several of these games can be
found on marketers' websites that feature characters related to their brands. Some sites require
that he give information such as his name and address, and his mother is very concerned about
this. Which major concern regarding Internet marketing and children does this highlight?
A.
B. exploitation of children through manipulative sales techniques

C.
D.
inappropriate site content
E.
child pornography
46. Customized games that are placed on a company's website and prominently feature or integrate
the company's brands and products as part of the game itself are known as _____.
A.
brand games
B.
adver-games
C.
promo-games
D.
interactive games
E.
convergent games
47. Which of these provisions is NOT included in The Rule under COPPA?
A.
privacy policy
B.
parental notice
C.
parental consent
D.
confidentiality
E.
All of the above are included.
48. _____ relates to the collection and use of information from websites.
A.
Online privacy
B.
Online security
C.
Online research
D.
Online commerce
E.
Online marketing
20-13
49. Which of the following is the result of concern regarding the invasion of children's privacy?
A.
B.
C.
D.
E.
Telephone Consumer Protection Act

Children's Online Privacy Protection Act
Federal Do Not Call Registry
Children's Internet Protection Act
Children's Internet Act
50. Which of the following statements is TRUE regarding the Children's Online Privacy Protection Act
(COPPA)?
A.
It does not apply to nonprofits.
B. Information cannot be collected from children, used, or disclosed unless the website operator
has obtained verifiable parental consent after the information has been collected.
C.
The COPPA rules don't appear to be working.
D. It authorizes CARU to develop specific rules to implement the provisions of the act.
E.
All of the above are true.
51. What year did the rules based on the guidelines in the Children's Online Privacy Protection Act go
in to effect?
A.
1990
B.
1995
C.
1998
D.
2000
E.
2002
52. Rita has noticed when she goes to children-oriented websites with her daughter that there are
clear and prominent links to privacy policies and that whenever an attempt to request information
appeared, it required her consent. These things that Rita has noticed are the result of which law?
A.
B.
C.
D.
E.

20-14
53. Regulation of marketing activities aimed at adults has focused on _____.
A.
product features
B.
marketing communications
C.
pricing practices
D.
E.
A and B
A, B, and C
54. Which part of the FTC Privacy Protection Framework relates to data security, reasonable
collection units, sound retention practices, and data accuracy?
A.
simplified choice
B.
greater transparency
C.
privacy by design
D.
Internet Privacy Act
E.
none of the above
55. Which of the following is(are) part of the FTC Privacy Protection Framework?
A.
privacy by design
B.
simplified choice
C.
D.
E.
A and C
all of the above
56. The FTC has recently put forth a new Privacy Protection Framework that includes _____.
A.
B.
C.
D.
E.
incorporating consumer privacy throughout the organization

simplifying consumer choice
increasing transparency of data practices
A and C
all of the above
20-15
57. Nat wants to comply with the FTC's recommendations regarding consumer-oriented commercial
websites that collect personal identifying information from or about consumers. Which of the
following is NOT one of the recommendations made by the FTC?
A.
provide notice to consumers that are transparent
B. allow consumers to choose how information concerning them will be used in a simplified
manner
C. require parental consent when collecting information from children under the age of 18
D. offer consumers reasonable access to the information a website has collected about them
E.
privacy by design
58. "Royal makes tires for the Jeep Liberty" is an example of a(n) _____.
A.
direct claim
B.
logical implication
C.
pragmatic implication
D.
inferred claim
E.
none of the above
59. Which of the following is a major concern regarding legal and ethical behavior with respect to
marketing communications?
A.
B.
C.
the tastefulness of the ad

the accuracy of the information provided
the media used to deliver the ad
D.
the creativity of the ad
E.
the effectiveness of the ad
60. What are the three major concerns regarding legal and ethical behavior with respect to marketing
communications?
A. the accuracy of the information provided, the adequacy of the information provided, and the
cumulative impact of marketing information on society's values
B. the accuracy of the information provided, the tastefulness of the ad, and the creativity of the ad
C. the media used, the prevalence of advertising, and the tastefulness of the ad
D. the amount of information provided, the tastefulness of the ad, and the cumulative impact of
marketing information on society's values
E. the media used, the accuracy of the information provided, and the manner in which the
information is provided
20-16
61. Critics of ads that emphasize beauty or sex appeal as major benefits feel that the harmful effects
may be most severe for which consumers?
A.
B.
C.
D.
E.
young men
young women
minorities
older men
older women
62. Implied meanings that consumers derive when interpreting language in a practical way are known
as _____.
A.
B.
C.
false claims
indirect claims
pragmatic implications
D.
practical meanings
E.
direct claims
63. Which of the following is the MOST difficult to regulate?
A.
B.
the explicit verbal content of ads

the subtle meanings implied by the visual content of ads
C.
the adequacy of the information provided in ads
D.
a website's privacy policy with respect to children
E.
the use of corrective advertising
64. Advertising run by a firm to cause consumers to unlearn inaccurate information they acquired as
a result of the firm's earlier advertising is called _____.
A.
controvertible advertising
B.
redundant advertising
C.
conforming advertising
D.
E.
retractive advertising
20-17
65. For years, Doan's Pills advertised that this medication is superior for relieving back pain. The FTC
found this claim to be deceptive and ordered Doan's to run advertising that informed consumers
of this deception in an attempt to cause consumers to unlearn the inaccurate information. What
type of advertising is this known as?
A.
B.
C.
D.
E.
66. Which of the following statements is FALSE regarding corrective advertising?
A. Firms injured by false claims of competitors can request it as a remedy from the FTC.
B. The FTC believes it to be a useful tool in protecting the public.
C. It is run by a firm to cause consumers to unlearn inaccurate information they acquired as a
result of the firm's earlier advertising.
D. A court ruling has challenged the conditions under which the FTC can require it.
E. The effectiveness of corrective advertising has not been debated.
67. In several ads for Listerine over a period of more than a year, the company made statements that
previous ads were not true in that Listerine cannot kill the germs that cause a cold. Which type of
advertising does this illustrate?
A.
B.
C.
D.
E.
68. Which of the following has the purpose of ensuring that consumers are provided with adequate
information?
A.
B.
C.

truth-in-lending legislation
FTC Corrective Advertising Act
D.
Internet Protection Act
E.
FTC's unfairness authority
20-18
69. Which of the following consumers are LEAST likely to be able to use the information provided by
marketers?
A.
men
B.
women
C. those who are relatively disadvantaged in terms of education and income

D.
E.
baby boomers
professionals who are too busy to attend to the information
70. Which law deals with nutrition labeling on products' packages?
A.
B.
C.
Truth-in-Labeling Law
Nutritional Labeling and Education Act
Trans Fat Labeling Act
D.
Fair Packaging and Labeling Act
E.
U.S. Packaging and Labeling Law
71. A new rule that requires marketers to list the number of grams of trans fat on a product's package
is an amendment of which law?
A.
B.
C.
Fat Labeling Act
D.
E.
72. What are trans fats?
A.
B.
hydrogenated oils
fats found in animal fat
C.
healthy fats
D.
fats found in olive and other plant oils
E.
synthetic fats
20-19
73. Susan picked up a package of potato chips and noticed on the front of the package the words, "0
grams of trans fat." She looked at the nutrition label and noticed that listed beneath the number of
total grams of fat was the number of grams of trans fat, which was zero in this case. The trans fat
information appearing on the nutritional label is a result of the new label rule enacted by the
______.
A.
NAD
B.
C.
FTC
NLEA
D.
OPPA
E.
FDA
74. What is the health risk of trans fat that prompted to government to require that the number of
grams of trans fat be provided in nutrition labels on packages?
A.
It raises the level of LDL (bad) cholesterol.
B.
It lowers the level of HDL (good) cholesterol.
C.
D.
E.
It raises blood sugar levels.

A and B
A, B, and C
75. While government and businesses want consumers to have full disclosure, which of the following
might result for consumers?
A.
B.
Information overload could occur.

There might be increased time to make a decision.
C.
There may be an inability to make a decision.
D.
All purchases become high-involvement situations.
E.
Inferior choices will be made.
76. Which of the following is a major issue consumer groups have concerning products?
A.
Are they safe?
B.
Are they environmentally sound?
C.
Do they meet consumers' needs?
D.
E.
A and B
A, B, and C
20-20
77. The primary federal agency involved in regulating pricing activities is the _____.
A.
FTA
B.
FTC
C.
FDA
D.
FPC
E.
FPA
78. New FDA package designs for cigarettes in 2012 will _____.
A.
show half the package covered with verbal warnings
B.
show half the package covered with visual warnings
C.
state that the incidence of smoking has declined since 2005
D.
A and B
E.
all of the above
True / False Questions

79. Marketing practices are sometimes controversial.
True
False
80. The regulation of marketing activities aimed at children focuses primarily on product safety,
advertising and promotions, and child pornography.
True
False
81. Piaget's stages of cognitive development indicate that children lack the ability to fully process and
understand information, including marketing messages, until around 12 years of age.
True
False
82. The Children's Advertising Review Unit (CARU) is part of the FTC's regulation of marketing
practices aimed at children.
True
False
20-21
83. CARU guidelines allow for the use of price minimizations such as "only $19.99."
True
False
84. CARU guidelines that prohibit price minimizations such as "only $19.99" are related to concerns
regarding advertising effects on health/safety/values.
True
False
85. Research indicates that disclaimers such as "Part of a nutritious breakfast" or "Each sold
separately" are fully understood even by children as young as 3 years old.
True
False
86. Four of the basic principles that underlie the CARU's guidelines for advertising directed at children
focus on the concerns over the impact of commercial messages on children's health and safety
and on their values.
True
False
87. Even ads clearly not targeting children can have potentially harmful consequences for them.
True
False
88. Advertising is frequently criticized as fostering overly materialistic, self-focused, and short-term
values in children.
True
False
89. Ads in such places as school buses, scoreboards, bulletin boards are classified by Consumers
Union as in-school ads.
True
False
90. Concern over the invasion of children's privacy prompted Congress to pass the Children's Internet
Protection Act in October 1998.
True
False
91. Regulation of marketing activities aimed at adults focuses on marketing communications, product
features, pricing practices, and privacy.
True
False
20-22
92. There are three major concerns focused on the information that marketers provide to consumers,
generally in the form of advertisements: the accuracy of the information provided, the adequacy of
the information provided, and the cumulative impact of marketing information on society's values.
True
False
93. Gillette's advertising for the M3 Power razor that claimed that "gentle micropulses stimulate hair
up and away from skin" was deemed to be literally false by the court hearing the case.
True
False
94. Determining the exact meaning of a marketing message is a simple process.

True
False
95. Corrective advertising is advertising run by the government to cause consumers to unlearn
inaccurate information they acquired as a result of a firm's earlier advertising.
True
False
96. Perhaps the most controversial pricing area today is the use of reference prices.
True
False
Essay Questions
97. Discuss the concerns about the ability of children to comprehend commercial messages.
20-23
98. You just graduated from college and started a new job at a consumer packaged goods
manufacturer. You will be involved with marketing activities aimed at children. Briefly describe the
controversial marketing activities aimed at children that you should be aware of.
99. List the key provisions of the Children's Online Privacy Protection Act (COPPA).
100 List the three guidelines of the new FTC Privacy Protection Framework.
.
20-24
101 What are the issues regarding pricing practices, and which federal agency regulates pricing
.
activities?
20-25
Chapter 20 Marketing Regulation and Consumer Behavior Answer Key
Multiple Choice Questions

1.
Government regulatory bodies _____.
A.
B.
C.
include the FDA and USDA

have increased consumer satisfaction with counterfeit goods
ensure the safety of counterfeit consumer goods
D. require manufacturers of branded goods to reimburse consumers who find they have
gotten a counterfeit version
E.
all of the above
Counterfeit goods are a major problem, but none of the issues stated is related to the actions
of government regulatory bodies in this regard.
AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 20-01 Explain the two major concerns in marketing to children that CARU deals with
Topic: Marketing Regulation and Consumer Behavior
2.
Which of the following statements is FALSE regarding marketing practices?
A.
B. Regulating marketing activities requires a higher level of understanding of consumer

behavior than does managing marketing programs.
C. There are many issues where the appropriate ethical action for marketers is not clear-cut.
D.
Society has declared that some marketing actions are clearly inappropriate.
E. There are laws and regulations that prohibit or require specific marketing actions.
Regulating marketing activities requires the same level of understanding.

Blooms: Remember
20-26
3.
The regulation of marketing activities aimed at children focuses primarily on which of the
following?
A.
product safety
B.
advertising
C.
promotion
D.
privacy protection
E.
all of the above
The regulation of marketing activities includes all of these.

Blooms: Remember
Difficulty: 1 Easy
Topic: Regulation and Marketing to Children
4.
One basis for the concern over marketing to children is based on _____.
A.
B.
C.
D.
attribution theory
Piaget's stages of cognitive development
the multiattribute model of cognitive development
dissonance theory
E.
mental development theory
Children lack the ability to fully process and understand information, including marketing
messages, until around 12 years of age.

Blooms: Remember
20-27
5.
The food industry has responded to concerns regarding children's health by
A.
providing healthier meal options for kids.
B. removing diet sodas and replacing them with diet and other healthier drinks on menus.
C.
D.
committing to advertising healthy dietary choices to children under 12.

A and B
E.
all of the above
The food industry understands and is responding to its responsibility to offer, distribute, and
market healthier food options to children.

Blooms: Remember
6.
According to Piaget's stages of cognitive development, children lack the ability to fully process
and understand information, including marketing messages, until around age _____.
A.
B.
C.
10
D.
12
E.
15
This is the basis for most regulation of advertising aimed at children and according to critics,
for some marketing programs that deliberately exploit children.

Blooms: Remember
Difficulty: 3 Hard
20-28
7.
What is the oldest age of a child that most regulation attempts to protect with respect to
marketing practices?
A.
B.
C.
D.
10
E.
12

Blooms: Remember
Difficulty: 3 Hard
8.
Conor is 15 years old. Which of the following statements is TRUE regarding him and other
children his age?
A. He most likely still lacks the ability to fully process and understand information, including
marketing messages.
B.
Most marketing programs aimed at him deliberately attempt to exploit him.
C. He most likely has the ability to fully process and understand information, including
marketing messages.
D. While he has the ability to process information, he does not yet have the ability to
understand the information.
E. Most regulation regarding marketing to children includes him.

Blooms: Remember
Difficulty: 3 Hard
20-29
9.
Which of the following is the American advertising industry's primary self-regulatory body?
A.
B.
C.
D.
Federal Trade Commission

National Advertising Division of the Council of Better Business Bureaus
Food and Drug Administration
Congress
E.
media
The NAD maintains a special unit to review advertising aimed at childrenthe Children's
Advertising Review Unit (CARU).

Blooms: Remember
Topic: Concerns about the Ability of Children to Comprehend Commercial Messages
10.
Which of the following is a special unit of the National Advertising Division of the Council of
Better Business Bureaus that specifically reviews advertising aimed at children?
A.
B.
C.
D.

E.
Much of the focus of CARU is related to children and their ability to comprehend commercial
messages.

Blooms: Remember
20-30
11.
Margaret wants to complain about an advertisement targeting children that she saw on a
program her children were watching. Which self-regulatory organization should she contact?
A.
B.
C.
D.

E.
Much of the focus of CARU is related to children and their ability to comprehend commercial
messages.

Blooms: Understand
12.
How many of the CARU's general guiding principles relate to a child's ability to comprehend
commercial messages?
A.
B.
C.
D.
E.
all of them
These guiding principles relate to the responsibility of advertisers when directing their
message to children.

Blooms: Remember
20-31
13.
Which of the following is NOT an information-processing-related guideline of the CARU?
A.
Claims should not unduly exploit a child's imagination.
B. Ads should demonstrate the performance and use of the product in a way that can be
duplicated by the child for whom the product is intended.
C. Representation of food products should be made so as to encourage sound use of the
product with a view toward healthy development of the child and development of good
nutritional practices.
D. Program personalities, live or animated, should not be used to sell products, premiums, or
services in or adjacent to programs primarily directed to children under 12 years of age in
which the same personality or character appears.
E. All disclosures and disclaimers material to children should be understandable to the
children in the intended audience and account for their limited vocabulary and language
skills.
There is no specific guideline regarding the health and nutrition representation of food
products.

Blooms: Remember
Difficulty: 3 Hard
14.
Piaget's theory of cognitive development holds that _____.
A.
B.
children must be taught how to be consumers

marketing stimuli play a critical role in child socialization
C.
intellectual capabilities can continue to expand throughout the lifecycle
D.
intellectual capabilities continue to expand until late middle age
E.
none of the above
Piaget's theory holds that children lack the ability to fully process and understand information,
including marketing messages, until around 12 years of age.

Blooms: Remember
20-32
15.
When Rose Art Industries changed its packaging due to concerns that size of the product
relative to the size of the child shown on the package picture could lead a child to believe that
the Super Lite toy was larger than it was, this is related to _____.
A. CARU's guidelines linked to possible information-processing deficits of children

B. CARU's guidelines linked to concerns about the health/safety/value effects of commercial
messages on children
C.
D.
COPPA's guidelines regarding processing deficits of children

all of the above
E.
none of the above
This particular guideline refers to whether an advertisement leaves a misleading impression
with a child.

Blooms: Understand
16.
CARU and others are interested in the impact that the _____ of children's advertising has, as
well as the ability of children to process advertising messages.
A.
B.
C.
D.
content
quantity
quality
tone
E.
all of the above
Content issue is related to whether children understand the selling intent of commercials, and
do they understand such aspects as comparisons.

Blooms: Remember
20-33
17.
What is the concern regarding the limited ability of children to comprehend advertising
messages?
A.
Do children understand the selling intend of commercials?
B.
Can children understand specific aspects of commercials?
C.
D.
Do children like commercials?

A and B
E.
A, B, and C
CARU and others are interested in the impact that the content of children's advertising has, as
well as the ability of children to process advertising messages.

Blooms: Remember
18.
Cathy was babysitting her two nieces on a Saturday morning, and they were watching
cartoons together. She noticed that every time a commercial pod came on, there was a little
jingle telling the kids that "after these messages, we'll be right back." This is an example of
_____.
A.
a discriminator
B.
a warning
C.
a separator
D.
a primer
E.
The advertising industry strives to separate children's commercials from the programs.

Blooms: Understand
20-34
19.
"Part of a nutritious breakfast," "Each sold separately," and "Batteries not included" are
examples of _____.
A.
B.
C.
D.
disclaimers
primers
warning labels
deception
E.
Some disclaimers are ineffective with preschool children because they have a difficult time
understanding these phrases.

Blooms: Remember
Difficulty: 1 Easy
20.
Which of the following is(are) a major area of concern regarding the large amount of time
children devote to watching television?
A.
B.
the impact of commercial messages on children's health and safety
C.
the impact of commercial messages on children's education
D.
A and B
E.
A, B, and C
Even if children accurately comprehend television ads, there are concerns about the effects
the content of these messages has on children.

Blooms: Remember
Topic: Concerns about the Effects of the Content of Commercial Messages on Children
20-35
21.
How many of CARU's basic principles focus on the concern regarding the impact of
commercial messages on children's values and their health and safety?
A.
B.
C.
D.
E.
5
Advertisers should reach out to children in a positive way regarding their health and safety.

Blooms: Remember
Difficulty: 3 Hard
22.
Which of the following CARU principles addresses the impact of commercial messages on
children's values and their health and safety?
A. Although there are many influences that affect a child's personal and social development, it
remains the prime responsibility of the parents to provide guidance for children. Advertisers
should contribute to this parent-child relationship in a constructive manner.
B. Advertisers are encouraged to capitalize on the potential of advertising to serve an
educational role and influence positive personal qualities and behaviors in children.
C. Advertisers should avoid social stereotyping and appeals to prejudice and are encouraged
to incorporate minority and other groups in ads and to present positive role models
whenever possible.
D. Products and content which are inappropriate for children should not be advertised or
promoted directly to them.
E. All of the above address the impact of messages on children's values and their health and
safety.
Advertisers should reach out to children in a positive way regarding their health and safety.

Blooms: Remember
20-36
23.
Which of the following statements regarding marketing and children's health and safety is
FALSE?
A. Ensuring that advertisements portray only safe uses of products is sometimes difficult, and
it is a controversial area.
B. Even ads clearly not targeting children can have potentially harmful consequences.
C. In many instances, children and teenagers are exposed to advertising directed at adults.
D. Advertising of health-related products, particularly snack foods and cereals, is
controversial.
E. Advertising sugared products such as presweetened breakfast cereals does increase their
consumption.
Advertisements should not portray adults or children in unsafe conditions.

Blooms: Remember
Difficulty: 3 Hard
24.
Cindy is bothered about the amount of advertising her 10-year-old daughter sees for cosmetics
and designer clothes that she feels are too suggestive in nature. Which is Cindy's major area
of concern regarding advertising to children?
A.
B.
C.
D.

the impact of commercial messages on her children's cognitive development
E.
the impact of commercial messages on her budget
Advertising is frequently criticized for fostering overly materialistic, self-focused, and short-term
values in children.

Blooms: Understand
20-37
25.
Hale noticed in a commercial that his children were watching that children riding bikes were
shown not wearing a helmet. He always makes his children wear helmets while riding their
bikes, but he's concerned about other children seeing this ad and thinking it's okay to not wear
one. What is Hale's major area of concern regarding advertising to children?
A.
B.
C.
D.

the impact of commercial messages on childrens cognitive development
E.
the impact of commercial messages on family's budgets
Advertisements should not portray adults or children in unsafe conditions.

Blooms: Understand
26.
Advertising is frequently criticized for fostering which type of values in children?
A.
B.
C.
D.
overly materialistic
self-focused
short-term
A and B
E.
A, B, and C
Advertising is frequently criticized for fostering overly materialistic, self-focused, and short-term
values in children.

Blooms: Remember
20-38
27.
Estimates of the number of TV ads that children are exposed to per year range from _____.
A.
1,000 to 5,000
B.
8,500 to 15,000
C.
18,000 to 40,000
D.
48,000 to 60,000
E.
73,000 to 100,000
These numbers are conservative because they don't include other popular media such as the
Internet.

Blooms: Remember
Difficulty: 3 Hard
28.
CARU reviews thousands of ads every year and has a(n) _____ success rate in resolving
issues related to children's advertising.
A.
10 percent
B.
25 percent
C.
50 percent
D.
80 percent
E.
over 95 percent
Even with this success rate, given the enormous amount of time children spend with all forms
of media, most will see many ads that are in violation of CARU guidelines.

Blooms: Remember
Difficulty: 3 Hard
20-39
29.
Which of the following is a marketing activity targeted at children that is considered

controversial?
A.
B.

kids' clubs
C.
mobile marketing
D.
E.
all of the above
These activities are in addition to television advertising.

Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 20-02 Describe the various marketing activities aimed at children that are controversial
Topic: Controversial Marketing Activities Aimed at Children
30.
Which of the following is referred to as the "Third Screen"?
A.
television
B.
computer
C.
D.
video games
cell phone
E.
iPod
A considerable portion of those in their teen years and younger have cell phones.

Blooms: Remember
20-40
31.
Ringtones, mobile games, and text-in contests are various types of promotional efforts
regarding which controversial marketing activity aimed at children?
A.
B.

kids' clubs
C.
mobile marketing
D.
commercialization of schools
E.
Internet marketing
Marketers have the ability to infiltrate yet another media domain with promotions and materials
that blur the line between advertising and entertainment.

Blooms: Remember
32.
A soft-drink manufacturer is running a promotion in which consumers text message from their
cell phone a code that they can find under the bottle cap. Consumers entering can win various
prizes. This is an example of which type of marketing activity aimed at children that is
considered controversial?
A.
B.

kids' clubs
C.
mobile marketing
D.
E.
Internet marketing

Blooms: Understand
20-41
33.
If consumers call a specific number, they can access games on their cell phones. The games
usually involve a branded product or an event, such as the release of a movie. This is an
example of which type of marketing activity aimed at children that is considered controversial?
A.
B.

kids' clubs
C.
mobile marketing
D.
E.
Internet marketing

Blooms: Understand
34.
Scott participated in a promotion that allowed him to download a ringtone for his cell phone
that played the Stars Wars theme song. This is an example of which type of marketing activity
aimed at children that is considered controversial?
A.
B.

kids' clubs
C.
mobile marketing
D.
E.
Internet marketing

Blooms: Understand
20-42
35.
Which of the following is a classification of commercialization of schools?
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
all of the above
Schools are often motivated by money as budgets continue to be tight.

Blooms: Remember
Difficulty: 1 Easy
36.
Which of the following is NOT a classification of commercialization of schools?
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
Mobile games are not a classification of commercialization of schools.

Blooms: Remember
20-43
37.
Ads in such places as school buses, scoreboards, and bulletin boards, as well as coupons and
free samples, represent which of the following?
A.
B.
in-school ads
ads in classrooms
C.
D.
E.
mobile games
Marketers have a captive audience in children by using in-school ads.

Blooms: Remember
38.
At Marci's school, there are logos for McDonald's, Coca-Cola, and Sprint around the football
stadium's scoreboard. She was also given pencils that had Gap written on them and a
notebook with the Nike swoosh. These are examples of _____.
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games

Blooms: Understand
20-44
39.
Channel One is an example of _____.
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
Channel One provides 12 minutes of news to participating classrooms, but contains 2 minutes
of commercials.

Blooms: Remember
40.
Corporate-sponsored educational materials and programs are also called _____.
A.
B.
propaganda programs (PPs)

biased educational materials (BEMs)
C.
sponsored educational materials (SEMs)
D.
commercial educational materials (CEMs)
E.
marketing educational materials (MEMs)
These are teaching materials provided by corporations, basically for free.

Blooms: Remember
20-45
41.
Which of the following are teaching materials provided by corporations, usually for free, that
come in various forms, including posters, activity sheets, and multimedia teaching aids?
A.
B.
in-school ads
ads in classrooms
C.
D.
E.
mobile games
Highly commercialized sponsored educational materials are thinly veiled ads with little
educational value.

Blooms: Remember
Difficulty: 1 Easy
42.
Marilyn is a recent college graduate teaching junior high school science. She has several
courses she has to prepare, so she was very pleased when Alcoa Corporation provided her
with a teaching unit on recycling. This teaching unit is an example of _____.
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
Highly commercialized sponsored educational materials are thinly veiled ads with little
educational value.

Blooms: Understand
Difficulty: 1 Easy
20-46
43.
The fourth grade class at Westview Elementary School won $10,000 for their school's music
program because they entered a contest sponsored by Oscar Mayer bologna in which they
sang the famous jingle for that brand (i.e., "my bologna has a first name, it's O-S-C-A-R....")
and won it for their state. This is an example of _____.
A.
in-school ads
B.
ads in classrooms
C.
D.
E.
mobile games
This is an example of how companies gain access to children and teens through various
contests and incentives.

Blooms: Understand
Difficulty: 1 Easy
44.
What is a major concern that has emerged regarding Internet marketing and children?
A.
B.

exploitation of children through manipulative sales techniques
C.
D.
A and B
E.
A, B, and C
Children are major users of the Internet; therefore, marketers use the Internet to communicate
with them.

Blooms: Remember
20-47
45.
James is 12 years old and likes to play games on the Internet, and several of these games can
be found on marketers' websites that feature characters related to their brands. Some sites
require that he give information such as his name and address, and his mother is very
concerned about this. Which major concern regarding Internet marketing and children does
this highlight?
A.
B.

exploitation of children through manipulative sales techniques
C.
D.
inappropriate site content
E.
child pornography
Children are major users of the Internet; therefore, marketers use the Internet to communicate
with them.

Blooms: Understand
46.
Customized games that are placed on a company's website and prominently feature or
integrate the company's brands and products as part of the game itself are known as _____.
A.
brand games
B.
adver-games
C.
promo-games
D.
interactive games
E.
convergent games
Younger children have a difficult time understanding the difference between content and
advertising.

Blooms: Remember
20-48
47.
Which of these provisions is NOT included in The Rule under COPPA?
A.
privacy policy
B.
parental notice
C.
parental consent
D.
confidentiality
E.
All of the above are included.
The Rule under COPPA applies to commercial operators by protecting children and limiting
their access to advertising sites.

Blooms: Remember
Topic: Children's Online Privacy Issues
48.
_____ relates to the collection and use of information from websites.
A.
Online privacy
B.
Online security
C.
Online research
D.
Online commerce
E.
Online marketing
Collecting information from children is a sensitive issue, given all we know about their
information-processing deficits relative to those of adults.

Blooms: Remember
20-49
49.
Which of the following is the result of concern regarding the invasion of children's privacy?
A.
B.
C.
D.

E.
This act authorizes the FTC to develop specific rules to implement its provisions.

Blooms: Remember
50.
Which of the following statements is TRUE regarding the Children's Online Privacy Protection
Act (COPPA)?
A.
It does not apply to nonprofits.
B. Information cannot be collected from children, used, or disclosed unless the website
operator has obtained verifiable parental consent after the information has been collected.
C.
The COPPA rules don't appear to be working.
D. It authorizes CARU to develop specific rules to implement the provisions of the act.
E.
All of the above are true.
Nonprofits are not covered under the COPPA.

Blooms: Remember
Difficulty: 3 Hard
20-50
51.
What year did the rules based on the guidelines in the Children's Online Privacy Protection Act
go in to effect?
A.
1990
B.
1995
C.
1998
D.
2000
E.
2002
The rules became effective in April 2000 and appear to be working.

Blooms: Remember
Difficulty: 3 Hard
52.
Rita has noticed when she goes to children-oriented websites with her daughter that there are
clear and prominent links to privacy policies and that whenever an attempt to request
information appeared, it required her consent. These things that Rita has noticed are the result
of which law?
A.
B.
C.
D.

E.
Privacy policy, parental notice, and parental consent are all part of COPPA.

Blooms: Understand
20-51
53.
Regulation of marketing activities aimed at adults has focused on _____.
A.
B.
C.
D.
product features
marketing communications
pricing practices
A and B
E.
A, B, and C
These issues include marketing communications, product features, and pricing practices.

Blooms: Remember
Learning Objective: 20-03 Discuss new guidelines by the FTC regarding online privacy protection for adults
Topic: Regulation and Marketing to Adults
54.
Which part of the FTC Privacy Protection Framework relates to data security, reasonable
collection units, sound retention practices, and data accuracy?
A.
simplified choice
B.
C.
privacy by design
D.
Internet Privacy Act
E.
none of the above
Companies should promote consumer privacy through their organizations and at every stage
of the development of their products and services.

Blooms: Remember
Topic: Consumer Privacy
20-52
55.
Which of the following is(are) part of the FTC Privacy Protection Framework?
A.
privacy by design
B.
simplified choice
C.
D.
A and C
E.
all of the above
The updated framework includes all three elements listed.

Blooms: Remember
56.
The FTC has recently put forth a new Privacy Protection Framework that includes _____.
A.
B.
C.
D.
incorporating consumer privacy throughout the organization

simplifying consumer choice
increasing transparency of data practices
A and C
E.
all of the above
With adult privacy issues, the FTC has been hesitant to craft specific legislation.

Blooms: Remember
Difficulty: 1 Easy
20-53
57.
Nat wants to comply with the FTC's recommendations regarding consumer-oriented

commercial websites that collect personal identifying information from or about consumers.
Which of the following is NOT one of the recommendations made by the FTC?
A.
provide notice to consumers that are transparent
B. allow consumers to choose how information concerning them will be used in a simplified
manner
C. require parental consent when collecting information from children under the age of 18
D. offer consumers reasonable access to the information a website has collected about them
E.
privacy by design
Adult privacy issues do not include children.

Blooms: Understand
58.
"Royal makes tires for the Jeep Liberty" is an example of a(n) _____.
A.
direct claim
B.
logical implication
C.
pragmatic implication
D.
inferred claim
E.
none of the above
This is a direct claim.

Blooms: Remember
Learning Objective: 20-04 Explain marketing communication issues related to adults including deceptive advertising
Topic: Marketing Communications
20-54
59.
Which of the following is a major concern regarding legal and ethical behavior with respect to
A.
B.
C.
D.
the tastefulness of the ad

the accuracy of the information provided
the media used to deliver the ad
the creativity of the ad
E.
the effectiveness of the ad
Determining the exact meaning of a marketing message is neither a simple process, nor easy
to judge for deception.

Blooms: Remember
60.
What are the three major concerns regarding legal and ethical behavior with respect to
A. the accuracy of the information provided, the adequacy of the information provided, and the
cumulative impact of marketing information on society's values
B. the accuracy of the information provided, the tastefulness of the ad, and the creativity of
the ad
C.
the media used, the prevalence of advertising, and the tastefulness of the ad
D. the amount of information provided, the tastefulness of the ad, and the cumulative impact
of marketing information on society's values
E. the media used, the accuracy of the information provided, and the manner in which the
information is provided
The three major concerns are accuracy, adequacy, and cumulative impact on society's values.

Blooms: Remember
20-55
61.
Critics of ads that emphasize beauty or sex appeal as major benefits feel that the harmful
effects may be most severe for which consumers?
A.
B.
young men
young women
C.
minorities
D.
older men
E.
older women
Those who cannot afford such products or who are not "good-looking" suffer.

Blooms: Remember
62.
Implied meanings that consumers derive when interpreting language in a practical way are
known as _____.
A.
B.
C.
D.
false claims
indirect claims
pragmatic implications
practical meanings
E.
direct claims
Pragmatic implications are implied meanings that are neither directly stated nor logically
implied.

Blooms: Remember
20-56
63.
Which of the following is the MOST difficult to regulate?
A.
B.
the explicit verbal content of ads

the subtle meanings implied by the visual content of ads
C.
the adequacy of the information provided in ads
D.
a website's privacy policy with respect to children
E.
the use of corrective advertising
Some are critical of beer advertisements that portray active young adults in groups having fun
and consuming beer.

Blooms: Remember
64.
Advertising run by a firm to cause consumers to unlearn inaccurate information they acquired
as a result of the firm's earlier advertising is called _____.
A.
B.
C.
D.
E.
Although the effectiveness of corrective advertising has been debated, the FTC considers it a
useful tool in protecting the public.

Blooms: Remember
20-57
65.
For years, Doan's Pills advertised that this medication is superior for relieving back pain. The
FTC found this claim to be deceptive and ordered Doan's to run advertising that informed
consumers of this deception in an attempt to cause consumers to unlearn the inaccurate
information. What type of advertising is this known as?
A.
B.
C.
D.
E.

Blooms: Understand
66.
Which of the following statements is FALSE regarding corrective advertising?
A. Firms injured by false claims of competitors can request it as a remedy from the FTC.
B.
The FTC believes it to be a useful tool in protecting the public.
C. It is run by a firm to cause consumers to unlearn inaccurate information they acquired as a

result of the firm's earlier advertising.
D. A court ruling has challenged the conditions under which the FTC can require it.
E. The effectiveness of corrective advertising has not been debated.

Blooms: Remember
Difficulty: 3 Hard
20-58
67.
In several ads for Listerine over a period of more than a year, the company made statements
that previous ads were not true in that Listerine cannot kill the germs that cause a cold. Which
type of advertising does this illustrate?
A.
B.
C.
D.
E.
Corrective advertising is run by a firm to cause consumers to unlearn inaccurate information
they acquired as a result of the firm's earlier advertising.

Blooms: Remember
68.
Which of the following has the purpose of ensuring that consumers are provided with adequate
information?
A.
B.
C.
D.

truth-in-lending legislation
FTC Corrective Advertising Act
Internet Protection Act
E.
FTC's unfairness authority
To ensure information adequacy, a number of laws have been passed, such as the truth-inlending legislation.

Blooms: Remember
20-59
69.
Which of the following consumers are LEAST likely to be able to use the information provided
by marketers?
A.
B.
C.
D.
men
women
those who are relatively disadvantaged in terms of education and income
baby boomers
E.
professionals who are too busy to attend to the information
Such consumers are less likely to understand the information and make good decisions.

Blooms: Remember
70.
Which law deals with nutrition labeling on products' packages?
A.
B.
C.
D.
Trans Fat Labeling Act
E.
While the Nutritional Labeling and Education Act of 1990 led to the nutrition fact box on food
packaging that includes a line for total fat, the new rule requires a line for trans fats as well.

Blooms: Remember
20-60
71.
A new rule that requires marketers to list the number of grams of trans fat on a product's
package is an amendment of which law?
A.
B.
C.
Fat Labeling Act
D.
E.

Blooms: Remember
72.
What are trans fats?
A.
B.
C.
D.
hydrogenated oils
fats found in animal fat
healthy fats
fats found in olive and other plant oils
E.
synthetic fats
Trans fats are the latest health threat because they raise the level of LDL (bad) cholesterol and
lower HDL (good) cholesterol.

Blooms: Remember
Difficulty: 3 Hard
20-61
73.
Susan picked up a package of potato chips and noticed on the front of the package the words,
"0 grams of trans fat." She looked at the nutrition label and noticed that listed beneath the
number of total grams of fat was the number of grams of trans fat, which was zero in this case.
The trans fat information appearing on the nutritional label is a result of the new label rule
enacted by the ______.
A.
NAD
B.
C.
D.
FTC
NLEA
OPPA
E.
FDA

Blooms: Understand
74.
What is the health risk of trans fat that prompted to government to require that the number of
grams of trans fat be provided in nutrition labels on packages?
A.
It raises the level of LDL (bad) cholesterol.
B.
It lowers the level of HDL (good) cholesterol.
C.
D.
It raises blood sugar levels.

A and B
E.
A, B, and C
Trans fats are the latest health threat because they raise the level of LDL (bad) cholesterol and
lower HDL (good) cholesterol.

Blooms: Remember
Difficulty: 3 Hard
20-62
75.
While government and businesses want consumers to have full disclosure, which of the
following might result for consumers?
A.
Information overload could occur.
B.
There might be increased time to make a decision.
C.
There may be an inability to make a decision.
D.
All purchases become high-involvement situations.
E.
Inferior choices will be made.
Consumers don't always utilize specific information items required for the particular decision.

Blooms: Remember
76.
Which of the following is a major issue consumer groups have concerning products?
A.
Are they safe?
B.
Are they environmentally sound?
C.
Do they meet consumers' needs?
D.
A and B
E.
A, B, and C
A variety of federal and state agencies are involved in ensuring products are safe to use.

Blooms: Remember
Learning Objective: 20-05 Discuss regulation concerns when marketing to adults as they relate to product and price
Topic: Product Issues
20-63
77.
The primary federal agency involved in regulating pricing activities is the _____.
A.
FTA
FTC
B.
C.
FDA
D.
FPC
E.
FPA
The Federal Trade Commission (FTC) is the primary federal agency involved in regulating
pricing activities.

Blooms: Remember
Topic: Pricing Issues
78.
New FDA package designs for cigarettes in 2012 will _____.
A.
show half the package covered with verbal warnings
B.
show half the package covered with visual warnings
C.
state that the incidence of smoking has declined since 2005

A and B
D.
E.
all of the above
New packages warning against the perils of smoking will be in place in 2012.

Blooms: Remember
Topic: Product Issues
True / False Questions
20-64
79.

TRUE
There are many issues where the appropriate ethical action for marketers is not clear-cut.

Blooms: Remember
Difficulty: 1 Easy
80.
The regulation of marketing activities aimed at children focuses primarily on product safety,
advertising and promotions, and child pornography.
FALSE
The regulation of marketing activities aimed at children focuses primarily on product safety,
advertising and promotions, and privacy protection.

Blooms: Remember
81.
Piaget's stages of cognitive development indicate that children lack the ability to fully process
and understand information, including marketing messages, until around 12 years of age.
TRUE
This is the basis for most regulation of advertising aimed at children and according to critics,
for some marketing programs that deliberately exploit children.

Blooms: Remember
20-65
82.
The Children's Advertising Review Unit (CARU) is part of the FTC's regulation of marketing
practices aimed at children.
FALSE
The Children's Advertising Review Unit (CARU) is part of the National Advertising Division of
the Council of Better Business Bureaus.

Blooms: Remember
83.
CARU guidelines allow for the use of price minimizations such as "only $19.99."
FALSE
CARU prohibits price minimizations such as "only" and "just."

Blooms: Remember
84.
CARU guidelines that prohibit price minimizations such as "only $19.99" are related to
concerns regarding advertising effects on health/safety/values.
FALSE
This guideline is related to the information-processing skills of children.

Blooms: Remember
20-66
85.
Research indicates that disclaimers such as "Part of a nutritious breakfast" or "Each sold
separately" are fully understood even by children as young as 3 years old.
FALSE
Some disclaimers are ineffective with preschool children because they have a difficult time
understanding these phrases.

Blooms: Remember
86.
Four of the basic principles that underlie the CARU's guidelines for advertising directed at
children focus on the concerns over the impact of commercial messages on children's health
and safety and on their values.
TRUE
Advertisers should reach out to children in a positive way regarding their health, safety, and
values.

Blooms: Remember
87.
Even ads clearly not targeting children can have potentially harmful consequences for them.
TRUE
Children watch prime-time television, which exposes them to ads not meant for them.

Blooms: Remember
Difficulty: 1 Easy
20-67
88.
Advertising is frequently criticized as fostering overly materialistic, self-focused, and short-term

values in children.
TRUE
Many are concerned that the consistent pressure to buy and own things is producing negative
values in children.

Blooms: Remember
Difficulty: 1 Easy
89.
Ads in such places as school buses, scoreboards, bulletin boards are classified by Consumers
Union as in-school ads.
TRUE

Blooms: Remember
90.
Concern over the invasion of children's privacy prompted Congress to pass the Children's
Internet Protection Act in October 1998.
FALSE
Concern over the invasion of children's privacy prompted Congress to pass the Children's
Online Privacy Protection Act.

Blooms: Remember
Difficulty: 3 Hard
20-68
91.
Regulation of marketing activities aimed at adults focuses on marketing communications,

product features, pricing practices, and privacy.
TRUE
These regulations cover marketing communications, product features, pricing practices, and
privacy.

Blooms: Remember
Difficulty: 3 Hard
Topic: Regulation and Marketing to Adults
92.
There are three major concerns focused on the information that marketers provide to
consumers, generally in the form of advertisements: the accuracy of the information provided,
the adequacy of the information provided, and the cumulative impact of marketing information
on society's values.
TRUE
The three major concerns are accuracy, adequacy, and cumulative impact on society's values.

Blooms: Remember
93.
Gillette's advertising for the M3 Power razor that claimed that "gentle micropulses stimulate
hair up and away from skin" was deemed to be literally false by the court hearing the case.
TRUE
The FTC requires that an advertisement must be truthful and nondeceptive, and advertisers
must have evidence to back up their claims.

Blooms: Understand
20-69
94.
Determining the exact meaning of a marketing message is a simple process.

FALSE
Marketers must often go to considerable lengths to provide messages that the relevant
audience will interpret correctly.

Blooms: Remember
95.
Corrective advertising is advertising run by the government to cause consumers to unlearn

inaccurate information they acquired as a result of a firm's earlier advertising.
FALSE
Corrective advertising is run by a firm to correct the firm's earlier advertising.

Blooms: Remember
96.
Perhaps the most controversial pricing area today is the use of reference prices.
TRUE
The concern arises when the external reference price is one at which no or few sales actually
occur.

Blooms: Remember
Essay Questions
20-70
97.
Discuss the concerns about the ability of children to comprehend commercial messages.
One basis for the concern over marketing to children is based on Piaget's stages of cognitive
development, which indicate that children lack the ability to fully process and understand
information, including marketing messages, until around 12 years of age. This and related
theories are the basis for most regulations of advertising aimed at children. The American
advertising industry's primary self-regulatory body, the National Advertising Division of the
Council of Better Business Bureaus, maintains a special unit to review advertising aimed at
childrenthe Children's Advertising Review Unit (CARU). Four of the eight principles that
underlie CARU's guidelines for advertising directed to children relate to their ability to
comprehend commercial messages:
a. Advertisers have special responsibilities when advertising to children or collecting data from
children online. They should take into account the limited knowledge, experience,
sophistication, and maturity of the audience to which the message is directed. They should
recognize that younger children have a limited capacity to evaluate the credibility of
information, may not understand the persuasive intent of advertising, and may not even
understand that they are being subject to advertising.
b. Advertising should be neither deceptive nor unfair, as these terms are applied under the
Federal Trade Commission Act, to the children to whom it is directed.
c. Advertisers should have adequate substantiation for objective advertising claims, as those
claims are reasonably interpreted by the children to whom they are directed.
d. Advertising should not stimulate children's unreasonable expectations about product quality
or performance.
The two main components regarding children's abilities to comprehend advertising messages
are as follows: (a) Do children understand the selling intent of commercials? (b) Can children
understand specific aspects of commercials, such as comparisons?

Blooms: Understand
20-71
98.
You just graduated from college and started a new job at a consumer packaged goods
manufacturer. You will be involved with marketing activities aimed at children. Briefly describe
the controversial marketing activities aimed at children that you should be aware of.
There are a number of marketing activities targeted at children in addition to television that are
controversial and for which various regulatory proposals are being considered. For example,
violent entertainment products (movies, videos, and music) labeled for those 17 and older
were, until recently, routinely marketed to kids. Another area of ongoing concern is kids' clubs,
which typically provide membership certificates, a magazine or website, the chance to win
prizes, and discounts or coupons of products offered by the sponsor. A major concern is that
these clubs disguise commercial messages. Additional issues described in the chapter include
mobile marketing (i.e., ringtones, mobile games, text-in contests), commercialization in schools
(i.e., in-school ads, ads in classrooms, corporate-sponsored educational materials and
programs, and corporate-sponsored contents and incentive programs), and Internet marketing
to children.

Blooms: Understand
20-72
99.
List the key provisions of the Children's Online Privacy Protection Act (COPPA).
Table 20-3 provides the key provisions of this law, and the answer provided here merely
highlights this information. This act requires that commercial websites that collect personal
information from children under 13 obtain prior parental consent before they collect that
information. Five elements of the act include:
a. Privacy policypost privacy policy o the homepage of the website and link to the policy
everywhere personal information is collected.
b. Parental noticeprovide parents notice about the site's information collection practices
and with some exceptions, get verifiable parental consent before collecting personal
information from children.
c. Parental consentgive parents the choice to consent to the collection and use of a child's
personal information for internal use by the website, and give them the chance to choose not
to have that personal information disclosed to third parties.
d. Parental accessprovide parents access to their child's information, and the opportunity to
delete the information and opt out of the future collection or use of the information.
e. Conditional accessdo NOT condition a child's participation in an activity on the
disclosure of more personal information than is reasonably necessary for the activity.
f. Confidentialitymaintain the confidentiality, security, and integrity of the personal
information collected from children.

Blooms: Understand
Difficulty: 3 Hard
100.
List the three guidelines of the new FTC Privacy Protection Framework.
a. Privacy by designcompanies should promote consumer privacy through their

organizations and at every stage of the development of their products and services.
b. Simplified choicecompanies should simplify consumer choice about personal
information data collection.
c. Greater transparencycompanies should increase the transparency of their data
practices, including clearer privacy notices, reasonable access, prominent disclosures, and so
on.

Blooms: Understand
20-73
101.
What are the issues regarding pricing practices, and which federal agency regulates pricing
activities?
Consumer groups want prices that are fair (generally defined as competitively determined) and
accurately stated (contain no hidden charges). The FTC is the primary federal agency involved
in regulating pricing activities. Perhaps the most controversial pricing area today is the use of
reference prices. An external reference price is a price provided by the manufacturer or retailer
in addition to the actual current price of the product. The concern arises when the reference
price is one at which no or few sales actually occur. Most states and the federal government
have regulations concerning the use of reference prices, but they are difficult to enforce. Given
the history of abuse of reference prices, it is not surprising that many consumers are skeptical
of them.

Blooms: Understand
20-74

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Chapter 20

Marketing Regulation and Consumer Behavior

Multiple Choice Questions

include the FDA and USDA

all of the above

2. Which of the following statements is FALSE regarding marketing practices?

Marketing practices are sometimes controversial.

B. Regulating marketing activities requires a higher level of understanding of consumer behavior

all of the above

5. The food industry has responded to concerns regarding children's health by

providing healthier meal options for kids.

Federal Trade Commission

B. National Advertising Division of the Council of Better Business Bureaus

Food and Drug Administration

Children's Advertising Review Unit (CARU)

National Advertising Review Board (NARB)

National Children's Advertising Division (NCAD)

National Children's Advertising Review Board (NCARB)

Federal Trade Commission (FTC)

Children's Advertising Review Unit (CARU)

National Advertising Review Board (NARB)

National Children's Advertising Division (NCAD)

National Children's Advertising Review Board (NCARB)

Federal Trade Commission (FTC)

13. Which of the following is NOT an information-processing-related guideline of the CARU?

Claims should not unduly exploit a child's imagination.

children must be taught how to be consumers

C. intellectual capabilities can continue to expand throughout the lifecycle

none of the above

A. CARU's guidelines linked to possible information-processing deficits of children

all of the above

none of the above

Do children understand the selling intend of commercials?

Can children understand specific aspects of commercials?

Do children like commercials?

the impact of commercial messages on children's values

B. the impact of commercial messages on children's health and safety

the impact of commercial messages on children's education

the impact of commercial messages on children's values

B. the impact of commercial messages on children's health and safety

the impact of commercial messages on the economy

D. the impact of commercial messages on her children's cognitive development

the impact of commercial messages on her budget

the impact of commercial messages on children's values

B. the impact of commercial messages on children's health and safety

the impact of commercial messages on the economy

D. the impact of commercial messages on childrens cognitive development

the impact of commercial messages on family's budgets

violent entertainment products

30. Which of the following is referred to as the "Third Screen"?

violent entertainment products

violent entertainment products

violent entertainment products

violent entertainment products

35. Which of the following is a classification of commercialization of schools?

corporate-sponsored educational materials and programs

corporate-sponsored contests and incentive programs

all of the above

36. Which of the following is NOT a classification of commercialization of schools?

corporate-sponsored educational materials and programs

corporate-sponsored contests and incentive programs

corporate-sponsored educational materials and programs

corporate-sponsored contests and incentive programs