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17136C Understanging Buyers Ch.13 Legal and ethical issues Section A:True or False
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1.The ACCC is the federal organisation whose charter is to strengthen the rights of consumers. Answer: Tpage 380 2.Consumer protection laws in Australia exist only at federal level. Answer: Fpage 380 3.The advertising industry has adopted a system of self-regulation, which means they don’t need to pay attention to the ACCC. Answer: Fpage 380 4.Voluntary industry codes of practice cover ethical areas of behaviour by marketers in their dealings with consumers. Answer: Tpage 381 5.The Advertising Standards Board is responsible for making sure that advertisements reach a certain standard of excellence. Answer: Fpage 381
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6.Industry codes of practice are designed to enhance the image of the industry by making sure that members behave legally and ethically. Answer: Tpage 381 7.Industry codes of practice, particularly those associated with advertising, are always adhered to. Answer: Fpage 384 8.One of the major legislative impacts on this industry in recent years is the introduction of the National Privacy Principles. Answer: Tpage 388 9.The ADMA code of conduct covers the use of SMS in direct marketing. Answer: Tpage 388 10. Activities which are unethical are also illegal. Answer: Fpage 390
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17136C Understanging Buyers Ch.13 Legal and ethical issues Section B:Multiple Choice
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Question 1 The Australian Consumer Association is: a) Independent b) Non-political c) Government funded d) a and b only Answer: Dpage 380 Question 2 One of the most significant changes in the Australian government regulatory environments is: a) The abolishment of the Trade Practices Act b) The establishment of the Australian Competition and Consumer Commission (ACCC) c) The abolishment of the Price Surveillance Act d) All of the above are significant Answer: Bpage 380
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Question 3 Industry self-regulation means the: a) State level regulates a certain industry b) Federal level regulates a certain industry c) Local municipal level regulates a certain industry d) Industry regulates itself through its own formulation of rules Answer: Dpage 380 Question 4 In Australia, the various forms of self-regulation cover a broad range of industries, including: a) Advertising b) Direct marketing c) Financial services sector d) All of the above Answer: Dpage 380
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Question 5 The ACCC has conducted enquiries into: a) Telecommunications b) Petrol c) Fitness products d) All of the above Answer: Dpage 380 Question 6 In Australia, the ________________ is responsible for handling complaints about the content of particular advertisements in all media, and whether or not an ad has breached certain codes. a) Media Council of Australia b) Advertising Standards Board c) Advertising Federation of Australia d) Advertising Council Answer: Bpage 381
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Question 7 An industry code of practice is: a) An attempt to raise the image of the industry through ethical behaviour b) The same as the Trade Practices Act, but focused on the industry c) Something to make consumers think the industry cares about them d) Compulsory for all businesses within the industry Answer: A page 381 Question 8 The existence of an industry code of practice: a) Means consumers can trust everyone in the industry b) Means businesses that do not sign up for it will be excluded from the industry c) Does not provide a guarantee that all businesses within the industry will behave ethically d) Means the industry association can force members to adhere to it Answer: Cpage 381
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Question 9 The federal and state governments are considering introducing legislation to cover car advertising, because: a) They feel like it b) Advertisements show unsafe driving practices, despite the voluntary code of conduct c) There is too much bad language in car advertisements d) To blame advertisers for road accidents Answer: Bpage 382 Question 10 The Therapeutic Goods Act 1989 covers products such as: a) Prescription products only b) Products that are only sold in health food stores c) Any products that are marketed as having therapeutic or health benefits d) Health products excluding prescription products Answer: Cpage 383
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Question 11 Advertisers of products targeted at children have: a) Additional ethical responsibilities, with a separate code for advertising to children b) The same ethical responsibilities as all other advertisers c) Fewer ethical responsibilities than all other advertisers d) All of the above Answer: A page 383 Question 12 Health and obesity is: a) The latest thing politicians think they can gain votes by addressing b) An important issue to consumers c) A great marketing opportunity where advertisers can exaggerate claims because consumers want to believe in quick fixes d) A social problem, but not one that advertisers need to give special attention Answer: Bpage 383
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Question 13 The NSW alcohol abuse summit in August 2003: a) Didn’t discuss alcohol advertising b) Threatened to impose compulsory regulations if advertisers didn’t start obeying the voluntary code of practice c) Seemed to think there was no real problem with alcohol advertising d) Criticised alcohol advertising for anti-social and irresponsible behaviour Answer: Dpage 384 Question 14 The beer industry’s main lobby group’s ‘retailer alert’ is designed to persuade retailers to: a) Stop beer theft b) Stop blatant in-store advertising of spirits c) Withdraw in-store advertising of products directed at teenagers, but continue selling the products to responsible adults d) Withdraw products that are marketed aggressively to teenagers Answer: D page 384
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Question 15 The reason Australian Associated Brewers proposed the ‘retailer alert’ is to: a) Protect the liquor advertising self-regulation system from interference by government b) Control all alcohol advertising c) Force the industry to behave ethically d) Transfer the responsibility for teenage over-drinking from advertisers to retailers Answer: Apage 384 Question 16 The National Privacy Act 1988: a) Protects the privacy rights of businesses b) Protects people from their busy-body neighbours c) Includes regulations about the collection and use of information about individuals d) Includes regulations about the use of people’s pictures taken in public settings Answer: Cpage 385
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Question 17 The Privacy Amendment (Private Sector) Act applies to: a) Businesses with an annual turnover of over $3 million b) Businesses with an annual turnover of over $3 million and smaller businesses in health services, direct marketing and contract services c) All businesses d) Businesses that keep data bases of their customers Answer: Cpage 386 Question 18 What does adherence to the National Privacy Principles mean to business? a) A marketing tool that can increase sales through greater consumer confidence b) Another additional cost for business c) The removal of opportunities to increase sales d) Different rules for businesses that trade in a number of countries Answer: Apage 386
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Question 19 The Direct Marketing Association has developed its own code of practice because: a) The normal advertising codes of practice don’t apply to it b) The industry is growing rapidly c) The industry has distinct characteristics that require additional codes of conduct d) Consumers don’t really trust direct marketers Answer: Cpage 388 Question 20 SMS as a direct marketing tool is: a) Not happening b) Growing among businesses such as pubs and clubs c) Going to be as big a problem as spam e-mail d) Too expensive to use Answer: Bpage 389
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Question 21 The ‘freedom of speech’ argument suggesting advertisers should be able to say anything as long as it is legal: a) Is true b) Is not true c) Disregards social behaviour d) Disregards social responsibility Answer: Dpage 393 Question 22 Codes of conduct preventing advertisers making any claim as long as it is legal: a) Prevent them making money b) Link social responsibility to the operation of a business c) Are just a pretence to persuade governments that they don’t need to interfere in the running of businesses d) Are just another step towards a totalitarian state Answer: Bpage 393
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Question 23 The Advertising Standards Bureau is seen as being _____________________ in relation to advertisements that some members of the community feel are inappropriate, for example the Windsor Smith and Chivas Regal billboard advertisements. a) Effective b) Ineffective c) Supportive of the community complaints d) Very strong Answer: B page 394 Question 24 The ACA is the: a) Australian Competitor’s Association b) Australian Consumer’s Association c) Australian Competition Authority d) Australian Consumer’s Authority Answer: B page 395
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Question 25 It would be wise for all businesses to adhere to their industry codes of conduct because: a) If they don’t, they may be regulated b) If they don’t, consumers will regard them as unprofessional c) Consumers will only buy from businesses that do d) It costs less Answer: Apage 396
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