Discuss the following advertising issues and determine whether the ads are ethical. a. Mrs. Butterworth's syrup has a label that states there is "Grade A Butter" in the syrup. The fine print on the label describes "0.4 percent butter" in the "syrup
product." b. Carnation Coffeemate Lite is advertised as having "50% LESS FAT." The claim is true but there is less than 0.5 grams of fat eliminated from Lite as compared to regular Coffeemate. It is important to understand that the average American consumes 100 grams of fat per day.
a. The students should address the issues of whether the ad is legal (it is) and then move on to whether it is balanced and how it would make them feel to have a product using these descriptions. The example is similar to the manner in which some grocers display strawberries in the store: Only the ones on top are good, and the description or appearance may mislead the customer. The student should also discuss the fallout from such claims when consumers discover the discrepancy: loss of goodwill and public relations problems with resultant effect on sales.
b. Students should take the same approach as in answer (a) because the advantages of trying to use a health concern to sell products when there is little the product does to help can create a feeling of opportunism on the part of the company. In this case, the ad seems worse than the syrup because there are health consequences associated with this advertising. Presently the FDA and FTC are examining the issue of product advertising with respect to health claims and the use of the words lite, light, fat-free, and cholesterol-free.
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A party contracts to guaranty the collection of the debts of another. As a result of the guaranty, which of the following statements is correct?
A. The creditor may proceed against the guarantor without attempting to collect from the debtor. B. The guaranty must be in writing. C. The guarantor may use any defenses available to the debtor. D. The creditor must be notified of the debtor's default by the guarantor.
When using a perpetual inventory system, the Inventory account is credited when a sale is made
Indicate whether the statement is true or false.