Study guide for Exam 3/Final Exam
Study guide for Exam 3/Final Exam Res-Econ 162
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Date Created: 01/21/15
On Exam 2 Q 23 33 Exam 3Final Exam Thursday December 11th 810am November 13 2014 Consumer Reports 0 Consumer s Union 1936 by consumer activists no successful law suit 0 Independent nonprofit all driven by membership income from publication not advertising 0 Anonymous shoppers they ll buy products big and small SUVs and peanut butter expert testers nutritionists engineers chemists pharmacists who work for them will look at the product that shoppers bought 0 Focus on frequently purchased items amp regionally wellknown brands cars appliances electronics home amp garden babies amp kids money shopping health They ll never test a local grocery store goods product has to be nation wide for them to test 0 Generally not tested services exception of carlife insurance local house brands products with quality difficult to standardize clothing for example is hard to standardize products purchased by a very smell number of consumers only products bought by millions of Americans Types of Information Generally provided by above 1 Identity of brands amp retail outlets for national brands 2 Information about what are desirable characteristic in a product There are inherent to the products NOT price 0 Le peanut butter what characteristics of PB do you like I like it when there s no sugar added In beeralcohol content 3 CU rates amp ranks brands according to the extent to which to which brands possess these characteristics 0 Le the fact that there s no sugar added in the PB the alcohol content in beer They ll rate them excellent good poor Ripoffs misinterpretations amp deceptions O unethical behavior but not always illegal consumers are exploited O E g price gouging healthdiet products that don t amount to very much these products may go to misrepresentation or deception too They may make a claim that these pills will cure cancer This wastes your money AND keeps you from seeking further treatment for cancer This would be more than a ripoff 0 something reported falsely may be unintentional ie I did not know that this product has these side effects or intentional 0 conscious amp deliberate attempt to deceive amp mislead consumers I go out of my way to ensure that you re injured by this product Frauds 0 obviously deceptive and illegal practice 0 E g Bernie Madolf I know you re not gonna make money yet I have you invest with me Why Frauds Exist 1 Greedy producers and greedy sellers 0 Just want to make a lot of money don t care about who is getting hurt 2 Greedy and gullible consumers 0 Not just sellers 3 Inadequately informed consumers 0 Some people don t do their research 0 Happens to the elderly a lot but also everyone else 4 Inadequate legislation 0 The legislation we have right now is not enough to stop fraud 0 If you complain about something people fight back if it affects them so the law doesn t pass 5 Inadequate penalties 0 Almost none little fine 6 Many companies view penalty as an expense of doing business 0 Penalties don t hit the companiesperpetrators very hard It s pocket change to them 7 Corporations are considered as individuals 0 No human being gets penalized just the corporation as a whole If you don t send managementwhoever wronged to prison and make them pay for their crime then anyone can do anything They can just leave the company and move on 8 Poor regulation 0 Both political parties 0 Because they are written by people with special interests in mind 9 US basically a produceroriented society 0 People used to say and believe what s good for GM is good for the country 0 Coalmining Examples of Consumer Frauds 0 Counterfeiting 0 If you buy counterfeited purses watches won t kill you But buying counterfeited pharmaceuticals is 0 Dangerous to counterfeit contact lenses 0 Watches jeans purses luggage pharmaceuticals DVDs CDs very dangerous 0 Frauds against elderly amp vulnerable O Elderly are vulnerable he often times by themselves spouse dead children gone elderly home 0 Old weak frail sometimes too embarrassed to go to police to say something has happened 0 Happens even to educated 0 Social security checks are going right to elderly s bank accounts to avoid this problem 0 Uneducated affected people who don t speak English Mail orderphone order 0 Be careful is this a reputed dealer who is selling you this You could end up paying and getting a piece of junk O E g Ebay Cosmetics 0 People gullible fall for claims 0 Diet plans there s no way you can eat all the foods you want to eat and lose weight it doesn t work that way but people believe it 0 Jenny Craig how can you eat only their food for the rest of your life 0 Cosmetic surgeries Ie breast implants Who is doing these surgeries What is the success rate Health frauds Medical amp surgical frauds 0 For health and medical amp surgical prevents people from going to more traditional therapies that may save your life Food frauds 0 Organic foods are they better for you A lot of times no Missing heir schemes 0 We found your longdead relative and we ll give you 50 million of their money Contest winner deception 0 You ll get a free cruise Investment frauds 0 You re told if you invest with my company it s a high growth company it s done well people make lots of money here If you invest with me you ll get a lot of money 0 You need to do research these companies see if anyone has complained of them before etc do your due diligence Ponzi Scheme 0 Bernie Madolf biggest Ponsi scheme in the history of the world He promised to invest for wealthy people He had 12 return of investment year after year even if it was a recession This should have been a huge warning sign He d say to people Oh I have a lot of clients I don t know if I have the time to take care of your money This created an even greater demand He would use other people s money to pay for others 6567 billion dollars People lost all of their life savings He even sold from charities Charities 0 On TV give 15 per month and you can save Sally s life 0 You need to see if this charity is reputable ask to see financial statement What percent of your money is actually going to Sally 0 Sometimes they don t give money to the people you think they re giving money to Identity theft 0 To clear your name often takes 35 years During those 35 years your name is terrible No one can trust you No one allows you to borrow money It takes a lot of time effort money to clear your name of identity theft Be careful with your personal information November 18 2014 Common Seller Tactics 0 Bait and Switch 0 Have a sale on a certain brand and when you go to buy it they talk it down and try to switch you to a different brand 0 Tell you one thing then switch to trying to sell a different product 0 Limited time offers 0 It s on sale for just a short period of time come and get it 0 Sometimes they re truthful but other times they just try to get you worked up and thinking that you have to buy it because otherwise you ll miss your chance 0 Lowballing O Coined by Federal Trade Commission 0 Go to buy a car you ve done research you re a little afraid of buying it dealer tells you can you buy this car for 30000 instead of 35000 This seems great to you You tell the dealer your going to think about it and make arrangements for financing it You go back 2 days later The same person who told you it was 30000 now goes back on his word and says I am so sorry it s actually 35000 My boss got so mad at me Now that your heart is set on this car you re going to get it anyway 0 Quote low price then they change it but you re already set on it 0 Highballing 0 You take your car to be traded in and you want to get another car Mechanic said your car is only worth 5000 Dealer says You could get your car for 7000 You think you got a great deal on the traded but you didn t 0 Quote you a high price 0 Fake normal price 0 On price tag normal price and sale price They jack up the fake price to make you feel like you re getting a good deal 0 Free gimmick 0 Even very rich and sophisticated will fall for this 0 If you spend a certain amount of money you ll get something really smallof very little value for free 0 Spend thousands of dollars on a car and you get free oor mats 0 People like the idea of a free gift no matter what the worth is 0 Fear sell 0 You re frightened into buying something 0 There may be termites in your house So you get so scared that there are so you let them go look for termites The chances that there are not termites is slim to none so inevitably they will find them and you re so scared that you tell the to pay for you Antitrust 0 body of laws that protect competition amp free enterprise in the market place 0 Ensure that we re exposed to companies that are competing 0 If many people are competing you ll end up with the best product at the lowest price 0 These laws enforced by the Attorney General 0 Purpose is to protect competition 0 If there is competition consumers will be offered goods amp services of higher quality amp lower prices 0 In theory and in practice 0 Antitrust laws are enforced by the Attorney General Common Antitrust Violations End up costing so much more for consumer illegal 0 Price fixing 0 23 dealers gas station owners etc getting together illegally at golf course on phone Say Let us not sell gas for more than per gallon 0 They decide to fix the prices so that you as a consumer end up paying a high price 0 Why against the lawanticompetitive Because you re faced with artificially manipulated prices wherever you turn 0 Detrimental to individuals and a state ie UMass public may end up spending millions more dollars on dorms military equiptment etc 0 Retail price maintenance AKA vertical price fixing 0 Producer manufacturer telling the seller consumer saying You can t sell my for less than this much Apple products jeans etc 0 Manufacturer cannot insist on a price can only suggest 0 Group boycott O Coke Pepsi Canada Dry decide to boycott Cola If you don t boycott them we won t allow you to sell our drinks in your store 0 If you have 4 brands proceeds devided by 4 companies If you have 3 brands proceeds only divided by less so you ll have more money 0 Cannot force retailer to boycott a product because it s in your best interest 0 Tying arrangements AKA reciprocal dealing agreements tying product amp tied product 0 You do something for me I do something for you O 2 serivesproductsdealers in this tying arrangement concepttying product amp tied product 0 Individual owns local TV channelnews station he has just purchased a radio station radio station is not very popular but TV station is very popular People love the news anchors etc The owner makes money through ads They tell a local store that wants to advertise on the TV station we ll let you if you also buy air time on my new radio station Tied productradio station tying productTV station Pressuring them to buy something they don t want but it s the only way you can get the other one 0 Allocation of customers markets amp territories horizontal division of markets 0 Local grocery stores Grocery stores in Amherst and N Hampston say Why don t you advertise for a certain product in Amherst and another product in North Hampston This way you keep costumers to yourself you don t try to compete with one another you try to do both do well make sure costumers go to stores only in your region In free market should be able to go anyway 0 Bid rigging 0 Want to put up new prisonshospitalsdorms at Umass Fed gvnt wants people to take care of highways Put out requests for bids Let people know you re interested in a job offer that must be done When we build something on campus we get bids from contractors in NY Connecticut etc The bids are supposed to be sealed secret but people talk to each other Tax payers end up paying for this cheat them They end up with expensive products that can be done for a lot less but people are being unethical and charging a lot Illegal I m just helping Joe out I m helping Ben out 0 Exclusive dealing agreements O Told you can only y on a specific airline when you go on research trips 0 Quid pro pro I ve done something for you 0 I m limiting you to these few people because I ve given you the money 0 End of the day drive up the cost of the product or service Often times tax payers end up paying more 0 Baseball and health insurance industries have been exempt from not being able to make these violations Tools to promote Competition How to punish a business for violation 1 Incentives for private individuals damages may recover treble damages plus costs amp attomey s fees 0 If you re guilty of any violation above and you ve bought all these companies in the industry ie oil company buys all gas stations have to sell stocks or assets of companies that you ve acquired 0 Can sue companies if you feel that there was a violation ie if gas prices are hiked up and you think it s a violation can say something 2 Break up rms a defendant must sell stockassets of acquired companies b defendant must get rid of functional level of operations oil refinery forced to sell its competitive retail outlet refrain from particular conduct in future and cancel existing contracts i Have to sell it cancel any contracts you have separate yourself from all the people you ve bought c defendant must liquidate assets and go out of business 10 Prevent mergers Clayton Act 0 When Bangs buy up one another fewer and fewer bangs so they can charge us however much they want not a good idea because they just get bigger and bigger 0 Justice department will look at prevents merges but looking at what will happen in A buys B What would be this impact in market place If impact is detrimental A cannot buy B Try to prevent a company from getting bigger and bigger 11 Cease and desist orders admits no guilt but agrees to stop practice 0 You have to stop what you re doing I ll stop but don t have to say you re guilty of sin Evolution of Consumer Protection Why do we need consumer protection 0 Consumer protection concerned with the fundamental nature of sellerconsumer relationship 0 Consumer protection is in best interest of all citizens everyone consumes 0 Important to economic basis of society 0 Best use of productive resourcesmatter of distribution of resources waste of resources 0 Consume wide variety of products cannot be expert in all areas I Think of all the products that you ve used today Do you know everything about all these products We trust that someone out there will give us safe foods and products We use too many products to keep track We trust them because there are certain standards businesses have to abide by 0 Health and safety concerns 0 Environmental issues I Make sure you re living in a place you can breath clean water amp air Problems of shortweighting someone cheats you amp adulterated food mix food item with something else ie think you re drinking coffee but other things mixed in from the beginning of times 0 Greek amp Roman law specifically prohibited selling wine diluted with water Offenses punishable by death 0 Diluted wine made water safe to drink 0 King John in Magna Carta AD 1215 standardization of measures of ale wine amp corn in England 0 Ancient times water was not safe People pooped in streets in sewage You could not trust water 0 Massachusetts Bay Colony consumer protection was issue in 1630 0 First general law against food adulteration was in Massachusetts we ve always been a leader in these things in 1641 inspected beef fish etc 0 As country expanded clear that national law was needed 1896 lecture on drugs amp food adulteration delivered to state medical society in LA 0 GF Hanson suggested adulteration and sophistication began with earliest human interactions 0 People would adulterate because they wanted money ie cartoon where little girl asks for tea to kill rats and chocolate to get rid of black beetles The reason they did these was because these food items were adulterated other things were added to them like sand and they were sold at high prices Three eras of consumer protection emerged in last 100 years Each era marked by something that killed people 0 Until fairly recently in human history people used relatively few number of items 0 Those few purchased were uncomplicated amp easy to appraise O Foodstuff in terms of freshness amp avor O Manufactured items ranging from nails to cartwheels in terms of ability to satisfy buyer s needs 0 What you see is what you get 0 If you want to buy fruits at market look at it can tell if it s rotten by sight smell feel If you re buying an ax can see if blade is sharp 0 Didn t need sophisticated knowledge to buy a good product 0 If purchase failed to live up to expectations consumer knew seller personally amp could seek redress easily 0 You bought this from a person you knew Peter for example Just go to him and tell him meat was rotten Apples were bad etc Soon enough everyone else will know Peter makes a bad progress 0 Not buying from a facelessnameless person from across the world 0 With localized market seller highly motivated to give satisfaction to consumer 0 A dissatisfied consumer could spol a large part of his market Last 15 d 0f19 h century fundamental S C relationship changed 0 US industrial revolution spilled mounting stream of goods to satisfy pentup consumer demand of centuries 0 Post civil war period advent of largescale production of many goods embodying technologies amp processes unfamiliar to buyer 0 War created new technologies Much of production took place in locations remote from markets in factories owned by impersonal corporations Now we may drink wine from France and have no idea who made it This was the age of production in a sellers market All kinds of fraudulent shoddy adulterated amp dangerous products pumped into marketplace some sellers didn t know some buyers didn t Attitude of seller William H Vanderbild the public be damned Both consumer amp seller lack of foresight amp ignorance e g of cigarettes 0 More doctors smoke Camels than any other cigarette Social technological amp market changes made SC relationship obsolete 0 Things were changing so rapidly Products such as Dr Scott s Electric Hairbrush amp therapeutic products O Hairbrush made of pure bristles not wire will cure headache in 5 min dandruff balding Pressure built in the last 30 years of 18th century for product quality regulations 0 First federal bill introduced in US Senate in 1874 don t need to know date 0 Senate committee appointed to investigate food products in 1899 don t need to know date 0 Under authority of US government Harvey Wiley presided over a team of boraXeating men known as the Poison Squad he got a team of young healthy strong men and called them the Poison Squad He fed them these poisons to see what it did to themmonitor them You wouldn t be able to do this today 0 McClure s Magazine responsible for breakup of Standard oil and expose of meat packing industry 0 1898 formed National Consumers League KNOW THIS DATE Scandaltragedy frist then books nal CP laws First era of Consumer Protection Upton Sinclair wrote The Jungle about the dirty meatpacking industry 0 Public amp Roosevelt concerned Passage of 2 bills in 1906 know this date 0 regulates food amp drugs in interstate commerce 0 regulates wholesomeness of meat shipped in interstate commerce 0 In 1914 FTC Act established the know this date oversees all kinds of business practices in US big and powerful O Attitude of no government intervention I Up until this point this was the attitude I Handsoff I Attitude from end of civil war to beginning of 20th century when all types of products were made available to the American public I Great corporate growth I Most business practices were legal I People felt threatened by government regulations what would it do to me My profit My business Will I be able to support my family Why is someone telling me what to do Because they felt this way they tried to sabatogewater down whatever rules the gvnt was propsing but they failed in the longrun and legislation finally passed December 2 2014 Second Era of CP The New Deal When people thought they were consuming unsafe foods they wanted more protection amp regulations Sellers fought new legislation that came about Finally though they passed laws From WWlprosperity of 1920 s no voice for consumers bc Harley and Coolige until 1927 0 Stuart Chase amp FJ Schlink Your Money s Worth 1927 don t need to know this date 0 O This book examined the facts behind advertising slogans These ads were trying to in uence the American consumer and they found a lot of ads didn t contain the truth Great Depression occurred soon after this was published Money was tight people lost jobs amp the Dust Bowl so starvation so every penny was meaningful All of the sudden lots of booksnewspapersmagazines exposed business practices that were illegalunsavoryfraudulent etc So strong antibusiness sentiment People became aware that government passed regulations decades before but this legislation didn t take care of everything that should have been taken care of these laws were weak 0 FDR laisezz faire to government interventionism O Gvnt came in with all sorts of laws so FDR went before congress and for the first time ever in history talked about consumer protection protecting consumers from all sorts of misdeeds ie misleading ads regulate food drug cosmetics Couldn t pass things until something horrible happened 0 1937 Elixir Sulfanilimide tragedy sulfabased antibacterial syrup 0 First this Elixir was given in tablet form A sales man had a great idea to turn this into a syrup that was sweetwould smell nice so children would be more likely to drink it Over 100 people mostly childrenmostly in south died because of this They died because they tasted this for fragrance avor but didn t test to see if it was toxic They mixed this tablet in the same solution we use for antifreeze solution They should have used gliserine than diathelonglycol There was no law that said you need to test the drugs that you sell to see if they re safe If you sell a drug that was poisonous it was bad for business but not illegal The manufacturer I could not have seen this result didn t know Pharmacist killed himself One side Why should federal government be the gate keeper to what we put in our medicine cabinet Federal government is big brother Other side We cannot be an expert on all drugs we need the government to tell us what is safe 10 0 expanded the 1906 Food amp Drug Act to include cosmetic amp therapeutic devices established standards of identity quality amp fill for food products new drugs can be introduced only after prior FDA approval 0 No new drugs could be sold to the public without testing 0 Used to be Food amp Drug Act 0 WheelerLea amendment passed jurisdiction over a wide range of practices considered harmful to consumers 0 FTC is very powerful 0 Anything that is unfair or deceptive which is a lot Third Era of CP Decade of 1960s WW2 intervened not as many consumer products coming out not as concerned with consumer protection until 1960s people started buying cars etc grandparents 1960svery turbulent a lot of social dislocation a lot of awareness for consumers coming into play TV a lot of books came out 0 Vance Packard The Hidden Persuaders 1950s 0 Looked at subliminal advertising consumers cheated in buying things we didn t want 0 Thalidomide tragedy Germanbased tranquilizer drug 0 Sold to prego women when experiencing morning sickness antinausea 0 Sold around world made in Germany 0 One doctor in US who protested this medication Francis Kelsey this should not be sold in US it s dangerous 0 Thousands of children were born with birth defects ie girl with no arms 0 Withdrawn in 1961 don t need to know lawsuit filed 50 years later 0 Rachel Carson The Silent Spring 1962 need to know author book date 0 DDT used to spray crops and grains 0 Birds came and ate the crops and grains and died 0 DDT can kill you 0 Ads DDT is good for meee 0 Beginning of environmental movement 0 Michael Harrington The Other America 1962 don t need to remember this one 0 Talking about America that was poor not prosperous 0 Jessica Mitford The American Way of Death 1963 don t need to know 0 Funeral services 0 President Kennedy Consumers Bill of Rights below President Kennedy Consumers Bill of Rights 1 Right to Choice right to make an intelligent choice among products amp consumers 0 Free enterprise right to make choices among GampS and brands 2 Right to information right to accurate info on which to make a free choice 3 Right to safety right to expect the health amp safety of the buyer are taken into account 0 Car that runs won t blow up laptop will work won t blow up 11 4 Right to be heard right to register dissatisfaction and have a complaint heard 0 If unhappy someone should listen to your complaint Don t need to know the 2 rights below 0 Right to consumer education President Johnson and Nixon 0 Right to redress President Nixon 0 Seek compensation if something is wrong More books continued 0 Ralph Nader Unsafe at any Speed 1966 know this one 0 Automobile companies letting us down could kill people but not spending that much money on safetyrelated research 0 Automobile accidents 0 If there s a recall with a car and company puts out recall notice never checked to see if people brought back their cars not our problem 0 National Traffic amp Motor Vehicle Safety Act 0 Made because of Nader s work 0 NITSAR also established because of Nader research bumpers airbags are trucks wide enough 0 Consumer Federation of America formed in 1968 0 Environmental Protection Agency EPA established in 1970 0 Regulations about clean air amp water 0 More consumer protection laws passed between 19651975 than during the entire period between 18901965 0 Reduction in momentum in 1980s 0 In terms of consumer protection 0 After great recession consumers protected more Consumer Financial Protection Bureau established to protect them 0 Caveat Emptor O No matter how much we think government should protect us it s really up to us to make sure we are safe cannot expect someone else to take care of you 0 Let the buyer beware 0 Now we use social media to spread news around the world TV is what was used during this time Federal Trade Commission FTC 1914 know this date 0 Independent of law enforcement agency Came into play he of Clayton Act 1914 0 Charged by congress to protect public against anticompetitive behavior amp unfair amp deceptive practices 0 Every company has equal chance same playing field 0 Commission has authority to stop business practices that restrict competition or that deceive or otherwise injure consumers 12 0 Can tell companies stop it 0 If interstate commerce is involved can step in 0 Involves a significant public interest can step in December 4 2014 US began to form itself into trusts Standard Oil was a company that had these trusts They were dangerous because they rose prices Then Clayton Actantitrust laws to promote competition 0 Electronic Fund Transfer EFT O Lawsrules meant to protect you when you re transferring money into electronic fund 0 Equal Credit Opportunity Act 0 When you apply for creditwant to borrow no one is discriminated because you re femalemale too youngold race if you have employment history should not be discriminated against 0 Equal access to credit 0 Fair Credit Billing Act 0 When you re billed and there is a mistake in your bill regarding credit your rights must be explained to you 0 Fair Credit Reporting Act 0 Gives consumers protection by letting them know what their rights are 0 Say you go to a bank want to borrow money and the bank will take all kinds of info about you but have to check your credit history because can t give you money without knowing how much of a risk you are They ll check with credit reporting beaurous If they give the bank a report about you that is negative you have the right to know where this negative report came fromwhat company gave this to you 0 Fair Debt Collection Practices Act 0 Prohibits debt collectors from harassing bothering threating you making obsene phone calls 0 People who call you when you haven t paid something 0 Truth in Lending Act 0 When someone lends you money they have to tell you the truth have to tell you how much it ll cost interest charges are finance charges any other charges they re going to impose upon you they should give this to you over the phone cannot hesitate to tell you the truth so you can compare with other companies etc 0 Mail Order Rule 0 Requires sellers when they ship purchases to you by mail have to tell you your rights when you can cancel this order how you can return it etc 0 Used car Rule 0 When you buy a used car know nothing about it 13 0 How would you know this car wasn t under water during Katrina You don t know this and then all the sudden you have car problems It s okay if you buy it knowing the risk knowing what issues it has but they need to tell you 0 If a dealer is selling a used car must post info about the carmade available to consumer so you know about it so you can make a good judgement 0 Fair Packaging and Labeling Act 0 When you buy consumer good must be labeled accurately so you know what s in it 0 Must tell you the quantity that s in it 0 They re supposed to list ingredients in any products ie drinks food ingredient that s listed first is the most plentiful O Cosmetics foods medicine etc products must be labeled properly 0 Textile Wool and Fur Acts 0 To protect consumers against mislabeling and false advertising and invoicing of wool and fur products ie clothing 0 Amended Wool Products Labeling and Textile Fiber Products Identification Acts 0 Two acts put together requires that all wool products and textile items we need to know if it s domestic or imported from US or somewhere else has to be labeled from country of origin 0 Key wordIdentification 0 MagnussonMoss Warranty Act 0 Guarantees and warranties of products 0 If warranty must tell you how long it s for if I m driving someone else s car will I be covered in it or only the person who owns it 0 Warranty info is provided to consumers so before you make purchase know what the warranty is for a product 0 Unordered Merchandise Statute 0 What are your rights if something you did not order showed up 0 If someone comes to you that you did not order it is now yours gift Food and Drug Administration FDA 1906 know this date Federal agency that oversees everything that we put onin our bodies governs all these products 0 Pesticide Chemicals Amendment 0 When you eat fruits amp veggies things sprayed O Tells farmers how much residue is allowed on these products because a little bit won t kill you 0 Delaney or Food Additives Amendment 0 Whenever food additives are added to food product before they put it inmarket the product they must test the product first to make sure they re safe for consumption 0 These additives must be tested on animals so chemicals don t induce cancer etc 0 Color Additive Amendment 14 O A lot of food and medicine contains coloring How do you know these dyes are safe Because of this amendment 0 Requires producers to make sure dyes that are used are safe Infant Formula Act 0 Requires that when you buy commercially prepared foods it must have a minimum amount of essential nutrients not just avored Medical Device Amendment 0 After WW2 revolution in biomedical technology a lot of products piled into market place It was good because a lot of medical issues could be solved from these devices 0 But among all the good things a lot of products were bad 0 E g IUD Shield marketed without proper marketing miscarriages women died pacemakers 0 Make sure medical devices that are inserted in our bodies are safe Fair Packaging and Labeling Act 0 FTC and FDA have jurisdiction over this Areas of Authority for FDA Food Drugs Medical Devices knee replacement have metallic thing in knee Biologics vaccines blood products after surgery need blood transfusion Animal feed and drugs drugs and foods you give to animals Cosmetics except soap Radiationemitting products cell phones lasers microwaves To achieve FDA s Objectives 1 2 3 Educate manufactures amp sellers so they know the law and won t violate them Educate consumers so they know the law amp can help enforce it Take legal action if law is violated FDA Issues New Rules for Restaurants Labeling Rule calories must be listed at restaurants sitdown fastfood movie theatres convenient stores Consumer Product Safety Commission CPSC 1972 Why established What does they do Four Purposes 1 2 3 Protect public from unnecessary injury amp risk 0 Car accidents 0 Stapling your finger O Mainly because people dying on nation s highways Assist consumer to assess comparative safety for products Develop safety standards for consumer products 15 4 Promote research amp investigation CPSC Operates in the following way 0 Information about accidents compiled in network National Electronic Injury Surveillance System NEISS 0 If you put your hand in a bender this gets recorded when you go to emergency room male female how old product that injured you 0 They determine if there is an issue with products do there need to be changesbans on products or was it just you being done 0 Website amp booklets information on banned products 0 Assist consumers get action with product problems 0 Establish safety standards of products Acts under CPSC These acts all protect kids from dying 1 Flammable Fabrics Act 0 Ensures fabrics don t go up in ames right away because clothing catches on fire often 2 Poison prevention Packing Act 0 It s hard to open an Advil container and other medicines to make sure children can t get into these medications easily 0 Prevent consumers from taking something they shouldn t take 3 Refrigeration Door Safety Act 0 Ensures you open the fridge from the inside because kids can get trapped in them 16
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