One of the Three-Part Tests the FTC Uses to Determine

question 17

Multiple Choice

One of the three-part tests the FTC uses to determine if an advertisement is untruthful or deceptive.

• A)The act or practice must be considered from the perspective of a consumer who is acting reasonably.
• B)The act or practice must be considered from the perspective of the advertiser who is acting responsibly.
• C)The act or practice must be considered to be mutually beneficial to the consumer and advertiser regardless of its reasonability.
• D)The representation, omission, or practice must be immaterial.
• E)The commission or practice as well as the representation is more than immaterial.

---

Definitions:

MRP

Stands for Marginal Revenue Product, which is the additional revenue produced by hiring or utilizing an additional unit of a resource.

Output Increases

A situation where the production capacity of an economy grows, leading to more goods and services being available.

Productivity Rises

An increase in the efficiency of production, often leading to more output with the same or fewer inputs.

Relative Prices

The price of a commodity or service in comparison to another, indicating its opportunity cost and economic choice.