[Miracle Pill] Julia Advertised That She Had Developed a Pill

question 51

Multiple Choice

[Miracle Pill] Julia advertised that she had developed a pill for women that would result in weight loss, wrinkle loss, and improved vitality; and that for men would result in all those things, plus hair growth. Her television advertisement showed miracle results allegedly obtained by consumers. Julia cautioned, however, that ingestion of the pill for six months was required before results would be evident. The pill was wildly popular. The Federal Trade Commission, however, investigated and determined that Julia had no reasonable basis for the claims she made in advertisements. Julia claimed that she was merely involved in the use of generalities and clear exaggerations. The Commission disagreed and issued a formal administrative complaint against her. After a hearing, an order was issued requiring that Julia stop advertising and selling the pills. After losing all appeals, Julia continued selling the pills until she was fined by the Federal Trade Commission. She has since left the country and cannot be located.
-Julia's defense that generalities and clear exaggerations are allowable by law is known as ________.

• A) Exaltation
• B) Puffing
• C) Crowing
• D) Swelling
• E) Boasting

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Definitions:

Rationing Device

A mechanism used to distribute scarce goods and services among competing uses or users.

Supply Shifts

Changes in the supply curve caused by factors other than the product's price, such as production costs, technology, and expectations, leading to more or less of the product being supplied at each price.

Equilibrium Quantity

The amount of goods or services supplied in a market that is exactly equal to the quantity demanded at the equilibrium price.

Rationing Device

A method used to distribute scarce resources, goods, or services among people.