Paul Rand Dixon, the colorful and often controversial member of the Federal Trade Commission, was honored Friday evening by the FTC at a reception in his honor to celebrate the 40th anniversary of his government service.

Current FTC Chairman Michael Pertschuk praised Dixon for his dedication to the agency through the years as trial attorney, chairman and member, for the courage of his convictione government lawyer involved in the case.

the confronte the health warnings the FTC forced on cigarette labels and advertising in the 1960s.

"Paul Band Dixon can follow a trial of greed and abuse of market power by instinct to its source, and his heart and vote are consistently with the consummer," Pertschuk said.

Dixon's almost legendary wit and candor also came in for praise. "Since Rand has been at the FTC, Washington has acquired the Kennedy Center, Wolf Trap, remodeled the National Theater and acquired a dozen dinner theaters," Pertschuk said. "But as long as Rand is with us, the FTC's got the best show in town.

Rand, as he is called by many, reminisced about his first job at the FTC 40 years ago for $2,000 a year cheking magazines for deceptive advertising in Wild West Magazine. "I was supposed to cut out anything I read that I didn't believe," he said.

Except for a four-year stint on Capitol Hill as counsel and staff director of the Senate Antitrust and Monopoly Subcommittee, Dixon spent his entire professional career at the FTC chairman and members as well wishers, who included many former FTC chairman and members as well as current staff and officials, that he has on occassion wondered. "I this worthwhile? Does it do any good?" and always concluded, "It would be a hell of a lot worse if we didn't try."

Joseph V. Arearo, retail advertising manager for The Washington Post, has been re-elected governor of the American Advertising Federation's second district. He will also serve a second consecutive term on the Federation's board of directors.

Arcaro joined the retail advertising staff of The Post in 1950 and was promoted to assistant retail advertising manager in 1962. In 1969, he was named to his current position.

June Hardy, also of the Post, was elected a lieutenant governor for the second district.

R. Robert Russell, a professor of economics at the University of California at San Diego, will join the staff of the Council on Wage and Price Stability as deputy director. Russell, who will work under Director Barry Bosworth, served on the staff of the Council of Economic Advisors in 1965 and 1966.