C241 STUDY PLAN
Before beginning this study plan, it is critical that you have access to the Course of Study and the
Cengage MindTap e-textbook. All WGU assessments are created using these textbooks, so they will be
your primary resources as you move through this work. When you work through th...
C241 STUDY PLAN
Before beginning this study plan, it is critical that you have access to the Course of Study and the
Cengage MindTap e-textbook. All WGU assessments are created using these textbooks, so they will be
your primary resources as you move through this work. When you work through this student plan, type
in your answers to the questions below and create a study guide using the key terms from each section.
You may also consider using the key terms to create flash cards that can be used as you prepare for the
exam.
FEDERAL REGULATIONS
Cha Study Questions
p
1. What is the purpose of Administrative law?
23 To check abuse of administrative power
To ensure to citizens an impartial determination of their disputes by officials so as to protect them from
unauthorized encroachment of their rights and interests
To make those who exercise public power accountable to the people
2. Describe the two types of administrative agencies.
Three basic functions: rulemaking, enforcement, and adjudication
Executive agencies: cabinet partners of the executive – assist president in carrying out executive functions.
Usually has a single administrator, director or secretary who is appointed by the president
Independent Regulatory Agencies: agencies outside the federal executive departments. Usually is run by a
commission or board made up of several members, one of whom serves as the agency’s chair
3. Explain the “Administrative Procedure Act.”
United States federal statute that governs the way in which administrative agencies of the federal
governments may propose and establish regulations
Was enacted to provide more judicial control over administrative agencies. If directives from Congress
concerning an agency procedure is absent the APA applies. The APA allows the courts to set aside any
agency actions found to be arbitrary, capricious or an abuse of discretion
Purpose is:
o To require agencies to keep the public informed of their organization, procedures and rules
o To provide for public participation in the rulemaking process (public commenting)
o To establish uniform standards for the conduct of formal rulemaking and adjudication
o To define the scope of judicial review
4. Describe and give examples of “Public Accountability” laws.
Freedom of Information Act (1966): Requires the federal government to disclose certain records to any
person or entity on written request, even if no reason is given for the request. Records must be made
available electronically on the Internet and other electronic formats.
o Exemptions: Information pertaining to national security
o Anything containing information that is confidential or personal
Government in the Sunshine Act (1976): Requires that “every portion of every meeting of an agency” be
open to “public observation”, and requires the public to be provided plenty of notice for those meetings
o Exceptions:
The subject of the meeting concerns accusing any person of a crime
An open meeting would frustrate the implementation of agency actions
The subject of meeting concerns future litigation or rulemaking
Regulatory Flexibility Act (1980): When effects of a new regulation will have a “significant impact upon a
substantial number of small entities,” the agency must conduct a regulatory flexibility analysis which
must measure the cost that the rule would impose on small businesses and consider less burdensome
alternatives.
o Contains provisions to alert small business about forthcoming regulations
o Reduces some recordkeeping burdens for small businesses, especially with regard to hazardous
waste management
Small Business Regulatory Enforcement Fairness Act (1996): Allows congress to review new federal
regulations for at least sixty days before they take effect. Also authorizes the courts to enforce the
, Regulatory Flexibility Act.
1. Define “Deceptive Advertising.”
Occurs when a reasonable consumer would be misled. Vague generalities and obvious exaggerations are
24
permissible
Claims that appear to be based on factual evidence but in fact are not reasonably supported by some
evidence that will be deemed deceptive
Claims based on half-truths meaning that the presented information is true but incomplete and therefore
leads consumers to a false conclusion
2. Explain how online deceptive advertising is monitored.
The FTC activity monitors online advertising and has issued guidelines to help online businesses comply
with existing laws including that all ads must be truthful and not misleading, the claims made must be
substantiated, ads cannot be unfair and there must be clear and conspicuous disclosure of any qualifying
or limited information.
3. Describe the actions that can be taken by the FTC.
Formal Complaint: sent to alleged offender who can settle or defend itself in a hearing
Cease-and-Desist: order requiring the company to stop the challenged advertising
Impose a sanction known as counter advertising: requires the company to advertise informing the public
about the earlier misinformation
Multiple Product Order: Requires a firm to stop false advertising for all of its products, not just the product
involved in the original action
Restitution: for wrongful payments made by consumers
4. Describe the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994.
The TCFAPA directed the FTC to establish rules governing telemarketing and to bring actions against
fraudulent telemarketers. The FTC enacted the Telemarketing Sales Rule (TSR) which requires a
telemarketer to identify the seller’s name, describe the product being sold and disclose all material facts
related to the sale. The TSR makes it illegal for telemarketers to misrepresent information or facts about
their goods or services. Also, a telemarketer must remove a consumer’s name from its list of potential
contacts at the customer’s request and must refrain from calling a consumer who is listed on the
National Do Not Call Registry
5. Explain labeling and packaging laws
Labels must be accurate, and they must use words that are easily understood by the ordinary consumer,
must specify the raw materials used in the product, such as the percentage of cotton, nylon, or other
fiber used in a garment, hazardous products must have warning label on them.
6. What is the Fair Packaging and Labeling Act?
The FPLA requires that food product labels identify the product, the net quantity of the contents and
serving size information, the manufacturer of the packager or distributor. Other requirements concern
the descriptions on packages, savings claims, components of nonfood products and standards for partial
filling of packages.
7. Explain the Postal Reorganization Act of 1970.
Abolished the then United States Post Office Department, which was part of the cabinet, and created the
United States Postal Service, a corporation-like independent agency with an official monopoly on the
delivery of mail in the United States.
Indicates that if a consumer receives unsolicited merchandise sent by the U.S. Mail, it may keep it, throw it
away, or dispose of it in any manner that they see fit and is not obligated to the sender
8. What is the purpose of the Federal Food, Drug, and Cosmetic Act?
The FDCA protects consumers against contaminated and misbranded food and drugs. The FDCA establishes
food standards that specify safe levels of potentially hazardous food additives and provides
classifications of foods and food advertising
9. Describe the Consumer Product Safety Act.
1972
The first comprehensive scheme of regulation over matters of consumers safety. The CPSA requires
distributors of consumer products to notify the CPSC immediately if a product contains a defect or has
an unreasonable risk of serious injury or death.
, Set safety standards for consumer products
Ban the manufacture and sale of any product that poses an “unreasonable risk” to consumers
Remove from the market any products it believes to be imminently hazardous
Require manufacturers to report any products already sold if they have proved to be hazardous.
10. Describe the Truth-in-Lending Act and the Fair and Accurate Credit Transactions Act.
Truth-in-Lending Act: Regulation Z: lender must disclose the annual percentage rate (APR), finance charge,
amount financed, and total payments (if more than 4)
Fair and Accurate Credit Transactions Act: established a national fraud alert, requires account numbers on
credit-card receipts to be truncated, requires the major credit card reporting agencies to provide free
copies of their own credit reports every twelve months.
o Applies only the individuals whose business it is to lend funds, sell on credit or arrange for the
extension of credit
1. Define Nuisance.
Common law doctrine under which persons may be held liable for using their property in a manner that
unreasonably interferes with others’ rights to use or enjoy their own property
2. Define Negligence and Strict Liability.
Negligence: based on a business’s alleged failure to use reasonable care toward a party whose injury
was foreseeable and was caused by the lack of reasonable care.
Strict Liability: Businesses engaged in ultra-hazardous activities are strictly liable for any injuries the
activities cause (do not have to prove failure to use reasonable care)
3. What is the purpose of the Environmental Regulatory agency?
To coordinate environmental responsibilities. Gives authority for regulating specific environmental
matters. All federal agencies must take environmental factors into consideration when making significant
decisions.
4. Describe the regulations designed to protect air and water.
Clean Air Act (1963,1970): Provides the basis for issuing regulations to control multistate air pollution,
includes mobile and stationary sources. Such emission standards for cars and hazardous air pollutants
for stationary sources.
Rivers and Harbors Appropriation Act of 1899: Prohibited ships and manufacturers from discharging or
depositing refuse in navigable waterways without a permit.
Clean Water Act (1972): Make waters safe for swimming, protect fish and wildlife, and eliminate the
discharge of pollutants into the water. Created a permit system (NPDES) to regulate discharge from point
sources of pollution.
25 Safe Drinking Water Act (1974): Requires the EPA to set maximum levels for pollutants in public water
systems.
Marine Protection, Research, and Sanctuaries Act of 1972 (Ocean Dumping Act): Regulates the
transportation and dumping of pollutants into ocean waters.
Oil Pollution Act (1990): May hold any party that discharges oil into navigable waters or into an
adjoining shore liable for cleanup costs and damages to natural resources, private property, and the local
economy.
5. Explain the Toxic Substance Control Act.
Regulates chemicals and chemical compounds that are known to be toxic
Controls the introduction of new chemical compounds by requiring investigation of any possible harmful
effects from these substances
Requires that manufacturers, processors, and other entities planning to use chemicals first determine
their effects on human health and the environment.
6. Define the Superfund – CERCLA
Comprehensive Environmental Response, Compensation, and Liability Act (1980): Regulate the clean-
up of disposal sites in which hazardous waste is leaking into the environment.
If the potentially responsible parties do no clean up the site, the EPA can clean up the site and recover
the clean-up costs.
The four primary elements are information-gathering and analysis system, authorization for the EPA to
respond to hazardous substance emergencies and arrange for clean-up if the responsible party fails to,
the creation of HSRTF (Superfund) to pay for the clean-up of hazardous sites, and it allows the
government to recover the cost of clean-up from responsible parties.
, 1. Describe and explain the major provisions of the Sherman Antitrust Act
Sections 1 and 2 contain the main provisions which state respectively that any contract that significantly
restrains interstate trade is illegal and monopolies are prohibited.
Section 3 states that sellers or lessors cannot conditionally sell or lease goods
Section 7 prevents mergers that could result in monopoly power or a substantial lessening of
competition in the marketplace
Section 8 prohibits individuals from serving on more than one board of directors of competing
corporations at the same time
2. What is the purpose of the Clayton Act of 1914?
Aimed at specific anticompetitive or monopolistic practices that the Sherman Act didn’t cover:
o Section 2- Price Discrimination
Robinson-Patman Act of 1936, cost justification, meeting a competitor’s prices, changing
market conditions
o Section 3- Exclusionary Practices
o Section 7- Mergers
o Section 8- Interlocking Directorates
3. Differentiate between “horizontal” and “vertical” restraints.
Horizontal Restraints: Anything that restrains competition between rival firms at different levels in the
same market, such as price-fixing agreements and group boycotts
Vertical Restraints: Any restraint on trade created by agreements between firms at different levels in the
manufacturing and distribution process, such as territorial or customer restrictions and resale price
maintenance agreements
4. Describe “Per se” violations.
A type of anticompetitive agreement that is considered to be so injurious to the public that there is no
need to determine whether it actually injures market competition; rather, it is in itself (per se) a violation
26 of the Sherman Act
5. Explain the purpose of Section 2 of the Sherman Antitrust Act.
Makes it unlawful for any person to “monopolize, or attempt to monopolize, or combine or conspire
with any other person or persons, to monopolize any part of the trade or commerce
6. Describe “monopolization.”
Monopolization is the possession of control of a specific market by a single entity and the willful
acquisition of maintenance of power. Both monopoly power (ability to affect prices) and intent must be
present to violate section 2 of the Sherman Antitrust Act.
7. Describe “price discrimination.”
Setting prices in such a way that two competing buyers pay two different prices for an identical product
or service
8. What are types of “exclusionary practices?”
Exclusive-dealing contracts that restrict a buyer from dealing with a competitor
Tying arrangements which obligate the buyer of a product to purchase an additional product as well
9. Differentiate between horizontal and vertical mergers
Horizontal Merger: A merger between two firms that are competing in the same market
o Overall concentration of the relevant market
o History of trending toward concentration
Vertical Merger: The acquisition by a company at one stage of production at a higher or lower stage of
production
o Whether the merger is designed to restrict competition
10. Define “interlocking directorates.”
When an individual serves on more than one board of directors of competing corporations at the same
time if either corporation has capital, surplus, or undivided profits aggregating more than $28,883,000
or competitive sales of $2,888,300 or more.
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