Full file at http://testbankeasy.eu/Test-bank-for-Fundamentals-of-Business-Law,-2nd-Edition---Roger-L.-Miller
Chapter 1
The Legal and Constitutional Environment of Business
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank,
= A question included in the previous edition of the Test Bank.
For your convenience, page references for both the Summarized and Excerpted case versions of Fundamentals of Business Law are included
Summarized Page: Fundamentals of Business Law: Summarized Cases, Eighth Edition
Excerpted Page: Fundamentals of Business Law: Excerpted Cases, Second Edition
true/false questions
1. Constitutional law includes only the U.S. Constitution.
ANSWER: F Summarized Page: 4 TYPE: N
Excerpted Page: 4
NAT: AACSB Analytic LOC: LOC: AICPA Legal
2. A federal law that conflicts with the U.S. Constitution will be deemed unconstitutional.
ANSWER: T Summarized Page: 4 TYPE: N
Excerpted Page: 4
NAT: AACSB Analytic LOC: LOC: AICPA Legal
3. A state law that conflicts with the U.S. Constitution will be deemed unconstitutional.
ANSWER: T Summarized Page: 4 TYPE: N
Excerpted Page: 4
NAT: AACSB Analytic LOC: AICPA Legal
4. A state constitution is supreme within the state’s borders so long as it does not conflict with the U.S. Constitution or a federal law.
ANSWER: T Summarized Page: 4 type: N
Excerpted Page: 4
NAT: AACSB Analytic LOC: AICPA Legal
5. The U.S. Constitution is the supreme law of the United States.
ANSWER: T Summarized Page: 4 TYPE: N
Excerpted Page: 4
NAT: AACSB Analytic LOC: AICPA Legal
6. Whether a law is constitutional depends on its source.
ANSWER: F Summarized Page: 4 TYPE: N
Excerpted Page: 4
NAT: AACSB Analytic LOC: AICPA Legal
7. Uniform laws apply in all states, including those in which the laws have not been adopted.
ANSWER: F Summarized Page: 4 type: N
Excerpted Page: 4
NAT: AACSB Analytic LOC: AICPA Legal
8. Every state has adopted the Uniform Commercial Code in its entirety.
ANSWER: F Summarized Page: 5 TYPE: N
Excerpted Page: 5
NAT: AACSB Reflective LOC: AICPA Legal
9. Common law is a term for social manners and customs that are familiar to most of us.
ANSWER: F Summarized Page: 5 type: N
Excerpted Page: 5
NAT: AACSB Analytic LOC: AICPA Critical Thinking
10. Federal administrative agencies specify the powers of Congress.
ANSWER: F Summarized Page: 5 TYPE: N
Excerpted Page: 5
NAT: AACSB Analytic LOC: AICPA Legal
11. Common law is not a source of legal authority.
ANSWER: F Summarized Page: 5 type: N
Excerpted Page: 5
NAT: AACSB Analytic LOC: AICPA Legal
12. A decision on a given issue by a court is not binding on an inferior court.
ANSWER: F Summarized Page: 6 type: N
Excerpted Page: 6
NAT: AACSB Analytic LOC: AICPA Legal
13. Judges use precedent when deciding a case in a common law legal system.
ANSWER: T Summarized Page: 6 TYPE: N
Excerpted Page: 6
NAT: AACSB Analytic LOC: AICPA Legal
14. Equity is a branch of law that seeks to supply remedies other than damages.
ANSWER: T Summarized Page: 7 type: N
Excerpted Page: 7
NAT: AACSB Analytic LOC: AICPA Legal
15. A defendant is a person against whom a lawsuit is brought.
ANSWER: T Summarized Page: 7 TYPE: N
Excerpted Page: 7
NAT: AACSB Analytic LOC: AICPA Legal
16. Monetary damages is a remedy at law.
ANSWER: T Summarized Page: 7 TYPE: N
Excerpted Page: 7
NAT: AACSB Analytic LOC: AICPA Legal
17. A substantive law creates or defines legal rights and obligations.
ANSWER: T Summarized Page: 7 TYPE: N
Excerpted Page: 7
NAT: AACSB Analytic LOC: AICPA Legal
18. In most states, a court can grant legal remedies or equitable remedies, but not both in the same case.
ANSWER: F Summarized Page: 7 TYPE: N
Excerpted Page: 7
NAT: AACSB Analytic LOC: AICPA Legal
19. Equitable remedies include injunctions and decrees of specific performance.
ANSWER: T Summarized Page: 9 TYPE: N
Excerpted Page: 9
NAT: AACSB Analytic LOC: AICPA Legal
20. The federal government cannot regulate commerce within a state, even if the commerce concerns more than one state.
ANSWER: F Summarized Page: 11 TYPE: N
Excerpted Page: 12
NAT: AACSB Analytic LOC: AICPA Critical Thinking
21. The state governments retain all powers not specifically delegated to the federal government.
answer: T Summarized Page: 12 type: N
Excerpted Page: 12
NAT: AACSB Analytic LOC: AICPA Legal
22. Local governments, including cities, can exercise police powers.
ANSWER: T Summarized Page: 12 TYPE: N
Excerpted Page: 12
NAT: AACSB Analytic LOC: AICPA Critical Thinking
23. When state regulations impinge on interstate commerce, commerce must yield to the regulations.
ANSWER: F Summarized Page: 12 TYPE: N
Excerpted Page: 12
NAT: AACSB Analytic LOC: AICPA Critical Thinking
24. The federal government retains all powers not specifically delegated to the states.
ANSWER: F Summarized Page: 12 TYPE: N
Excerpted Page: 13
NAT: AACSB Analytic LOC: AICPA Legal
25. The Bill of Rights protects individuals against various types of interference by the states.
ANSWER: T Summarized Page: 12 TYPE: +
Excerpted Page: 13
NAT: AACSB Analytic LOC: AICPA Legal
26. The First Amendment protects symbolic speech.
ANSWER: T Summarized Page: 12 TYPE: +
Excerpted Page: 13
NAT: AACSB Reflective LOC: AICPA Critical Thinking
27. The First Amendment does not protect commercial speech as extensively as noncommercial speech.
answer: T Summarized Page: 14 type: +
Excerpted Page: 14
NAT: AACSB Reflective LOC: AICPA Critical Thinking
28. A restriction on commercial speech that implements a substantial government interest may be valid.
ANSWER: T Summarized Page: 14 TYPE: N
Excerpted Page: 14
NAT: AACSB Analytic LOC: AICPA Critical Thinking
29. Political speech that would otherwise be protected by the First Amendment is prohibited if its source is a corporation.
ANSWER: F Summarized Page: 14 TYPE: N
Excerpted Page: 14
NAT: AACSB Reflective LOC: AICPA Critical Thinking
30. The First Amendment protects obscene speech.
ANSWER: F Summarized Page: 15 TYPE: N
Excerpted Page: 16
NAT: AACSB Reflective LOC: AICPA Critical Thinking
31. A federal law that promotes a religion is unconstitutional.
ANSWER: T Summarized Page: 16 TYPE: +
Excerpted Page: 16
NAT: AACSB Analytic LOC: AICPA Legal
32. A law that restricts a fundamental right does not violate substantive due process if it promotes a compelling state interest.
ANSWER: T Summarized Page: 18 TYPE: +
Excerpted Page: 19
NAT: AACSB Analytic LOC: AICPA Legal
33. A law that restricts a fundamental right violates substantive due process regardless of the type of state interest that the law “promotes.”
ANSWER: F Summarized Page: 18 TYPE: N
Excerpted Page: 19
NAT: AACSB Analytic LOC: AICPA Legal
34. A reference to “28 U.S.C. Section 1332” means that a federal court’s decision can be found on page 28 of Section 1332 of the United States Cases.
ANSWER: F Summarized Page: 24 TYPE: N
Excerpted Page: 24
NAT: AACSB Analytic LOC: AICPA Research
35. Rules and regulations adopted by federal administrative agencies are compiled in the Code of Federal Regulations.
ANSWER: T Summarized Page: 24 TYPE: N
Excerpted Page: 24
NAT: AACSB Analytic LOC: AICPA Research
MULTIPLE-CHOICE questions
1. Voters in North Carolina approve a new state constitution, after which the Ocean City Council passes new ordinances, the North Carolina Department of Parks and Recreation issues new rules, and the Ocean City Chamber of Commerce sends out new instructions. Sources of law do not include
a. instructions issued by the Ocean City Chamber of Commerce.
b. ordinances passed by the Ocean City Council.
c. rules issued by the North Carolina Department of Parks and Recreation.
d. state constitutions passed by popular vote.
ANSWER: A Summarized Page: 4 type: N
Excerpted Page: 4
NAT: AACSB Reflective LOC: AICPA Legal
2. The River City Council, the Santa Clara County Board, the Texas state legislature, and the U.S. Congress enact laws. These laws constitute
a. administrative law.
b. case law.
c. stare decisis.
d. statutory law.
ANSWER: D Summarized Page: 4 TYPE: N
Excerpted Page: 4
NAT: AACSB Reflective LOC: AICPA Critical Thinking
3. If a provision in the Florida state constitution conflicts with a provision in the U.S. Constitution
a. neither provision applies.
b. the provisions are balanced to reach a compromise.
c. the state constitution takes precedence.
d. the U.S. Constitution takes precedence.
ANSWER: D Summarized Page: 4 TYPE: N
Excerpted Page: 4
NAT: AACSB Reflective LOC: AICPA Legal
4. The U.S. Congress enacts a new federal statute that sets different standards for the liability of businesses selling defective products. This statute applies
a. only to matters not covered by state law.
b. only to those states that adopt the statute.
c. to all of the states.
d. to none of the states.
ANSWER: C Summarized Page: 4 type: N
Excerpted Page: 4
NAT: AACSB Reflective LOC: AICPA Legal
5. Mary is a consultant to the National Conference of Commissioners on Uniform State Laws. This organization
a. adopts uniform laws for the states.
b. applies uniform laws to the states.
c. drafts uniform laws for adoption by the states.
d. imposes uniform laws on the states.
ANSWER: C Summarized Page: 4 TYPE: N
Excerpted Page: 4
NAT: AACSB Reflective LOC: AICPA Critical Thinking
6. The Uniform Commercial Code has been adopted, at least in part, in
a. all states.
b. forty-five states.
c. twenty-five states.
d. no states.
ANSWER: A Summarized Page: 5 TYPE: N
Excerpted Page: 5
NAT: AACSB Reflective LOC: AICPA Legal
7. The Federal Trade Commission (FTC) is a government agency that issues rules, orders, and decisions. The Georgia state legislature enacts statutes. The Jackson County Board and the Peach City Council enacts ordinances. Administrative law includes
a. all law that affects a business’s operation.
b. decisions, orders, and rules of the FTC.
c. ordinances enacted by county board and the city council.
d. statutes enacted by the state legislature.
ANSWER: B Summarized Page: 5 type: N
Excerpted Page: 5
NAT: AACSB Reflective LOC: AICPA Legal
8. Areas of the law not governed by statutory or administrative law are
a. governed by the common law.
b. open to each individual’s own interpretation.
c. regulated by the states under the U.S. Constitution.
d. subject to local ordinances.
ANSWER: A Summarized Page: 5 TYPE: N
Excerpted Page: 5
NAT: AACSB Analytic LOC: AICPA Legal
9. Kurt is a judge hearing the case of Local Co. v. Macro Corp. Applying the relevant rule of law to the facts of the case requires Kurt to find previously decided cases that, in relation to the case under consideration, are
a. as different as possible.
b. as similar as possible.
c. at odds.
d. exactly identical.
ANSWER: B Summarized Page: 6 type: N
Excerpted Page: 6
NAT: AACSB Reflective LOC: AICPA Critical Thinking
10. The “common law” is referred to as the common law because
a. it consists of social manners and customs familiar to most of us.
b. it was originally applied only to commoners in England.
c. it was more or less uniform throughout England.
d. it focuses on minor, common violations.
ANSWER: c Summarized Page: 6 type: N
Excerpted Page: 6
NAT: AACSB Reflective LOC: AICPA Legal
11. The federal government and the state governments constitute the U.S. legal system. This system is based on the legal system of
a. Ancient Greece.
b. Ancient Rome.
c. England.
d. France.
ANSWER: C Summarized Page: 6 type: N
Excerpted Page: 6
NAT: AACSB Reflective LOC: AICPA Legal
12. As a judge, Sylvia applies common law rules. These rules develop from
a. administrative regulations.
b. court decisions.
c. federal and state statutes.
d. proposed uniform laws.
ANSWER: B Summarized Page: 6 type: N
Excerpted Page: 6
NAT: AACSB Reflective LOC: AICPA Legal
13. Dixie is a victim of Enoch’s violation of a criminal law. Criminal law is concerned with
a. the prosecution of private individuals by other private individuals.
b. the prosecution of public officials by private individuals.
c. the relief available when a person’s rights are violated.
d. wrongs committed against the public as a whole.
ANSWER: D Summarized Page: 9 type: N
Excerpted Page: 9
NAT: AACSB Reflective LOC: AICPA Legal
14. In a suit against Kathy, Lon obtains specific performance. This is
a. an equitable remedy and a remedy at law.
b. an equitable remedy only.
c. a remedy at law only.
d. not a remedy.
ANSWER: B Summarized Page: 9 type: N
Excerpted Page: 9
NAT: AACSB Reflective LOC: AICPA Legal
15. When Oceania, Inc., based in New York, does business internationally, the firm may be subject to international law. The sources of this law include
a. the laws of individual nations only.
b. treaties and international organizations only.
c. the laws of individual nations, and treaties and international organizations.
d. none of the choices.
ANSWER: C Summarized Page: 10 TYPE: N
Excerpted Page: 10
NAT: AACSB Reflective LOC: AICPA Legal
16. Household Furnishings, Inc., distributes its merchandise on an interstate basis. Under the commerce clause, Congress has the power to regulate
a. any commercial activity in the United States that substantially affects interstate commerce.
b. only activities that are in intrastate commerce.
c. only activities that are in local commerce.
d. only activities that are not in commerce.
answer: A Summarized Page: 10 type: N
Excerpted Page: 10
NAT: AACSB Analytic LOC: AICPA Legal
17. Tom files a suit against the state of Utah, claiming that a Utah state law violates the commerce clause. The court will agree if the statute
a. imposes a substantial burden on interstate commerce.
b. promotes the public order, health, safety, morals, or general welfare.
c. regulates activities within Utah’s borders.
d. regulates private activities.
answer: A Summarized Page: 12 type: N
Excerpted Page: 12
NAT: AACSB Reflective LOC: AICPA Decision Modeling
18. Miles, the president of Nano Games Corporation, claims that certain actions by the federal government and the state of Oklahoma infringe on rights guaranteed by the Bill of Rights. Most of these rights limit actions by