1) Business law consists of the enforceable rules of conduct that govern commercial relationships.
Answer: TRUE
Explanation: Business law consists of the enforceable rules of conduct that govern commercial relationships.
Difficulty: 1 Easy
Topic: An Introduction to Dynamic Business Law
Learning Objective: 01-01 Define business law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) Contracts, employment decisions and payments to suppliers are protected by business law.
Answer: TRUE
Explanation: Business behavior must follow legal guidelines. All contracts, employment decisions, and payments to a supplier are constrained and protected by business law.
Difficulty: 1 Easy
Topic: Law and Its Purposes
Learning Objective: 01-02 Relate the functional areas of business to the relevant areas of business law.
Bloom's: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
3) There are many purposes of the law. One such purpose is serving as a moral guide by indicating minimal expectations of citizens and organizations.
Answer: TRUE
Explanation: Serving as a moral guide by indicating minimal expectations of citizens and organizations is one purpose of the law.
Difficulty: 1 Easy
Topic: Law and Its Purposes
Learning Objective: 01-03 Recall the purposes of law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) Public law controls both disputes between private individuals and their government and disputes involving only private individuals.
Answer: FALSE
Explanation: Public law controls disputes between private individuals or groups and their government. Private law controls disputes between private individuals or groups.
Difficulty: 2 Medium
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) Criminal law lays out the rights and responsibilities implied in relationships between persons.
Answer: FALSE
Explanation: Civil law lays out the rights and responsibilities implied in relationships between persons.
Difficulty: 2 Medium
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
6) Only civil law regulates the behavior of individuals.
Answer: FALSE
Explanation: Both criminal and civil law regulate the behavior of individuals.
Difficulty: 2 Medium
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Understand
AACSB: Technology
Accessibility: Keyboard Navigation
7) Statutory law is the supreme law of the land and the foundation for all laws in the United States.
Answer: FALSE
Explanation: The U.S. Constitution is the supreme law of the land, and the foundation for all laws in the United States.
Difficulty: 2 Medium
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
8) Another name for case law is common law.
Answer: TRUE
Explanation: Case law, also called common law, is the collection of legal interpretations made by judges.
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
9) Case law interpretations are law, unless they are revoked later by new statutory law.
Answer: TRUE
Explanation: Case law interpretations are law unless revoked later by new statutory law.
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
10) When courts overturn precedent and create new precedent, they are obeying the principle of stare decisis.
Answer: FALSE
Explanation: Courts obey the principle of stare decisis when they rely on precedent. The principle of "stare decisis" refers to "standing by their decision." Because of stare decisis, rulings made in higher courts become binding precedent for lower courts. The Supreme Court can overturn precedent and create a new one, as it did in Brown v. Board of Education when it did not follow the precedent established by Plessy v. Ferguson.
Difficulty: 3 Hard
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
11) The decision of a state supreme court is binding on a lower court that is located in the same state.
Answer: TRUE
Explanation: When an issue is brought before a state court, the court will determine whether the state supreme court has made a decision on a similar issue, which creates a binding precedent or pattern of law the lower court must follow.
Difficulty: 2 Medium Page Ref: 6
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
12) Model or uniform laws are a source of law that are binding on courts.
Answer: FALSE
Explanation: Model or uniform laws serve only as suggestions for statutory law at the state levels.
Difficulty: 2 Medium
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
13) Constitutions and statutes always cover all of the detailed rules that affect business and government relations.
Answer: FALSE
Explanation: Constitutions and statutes never cover all the detailed rules that affect relationships between business and government.
Difficulty: 2 Medium Page Ref: 7
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
14) Presidents base the power to issue executive orders on Article II, Section 3 of the Constitution, which establishes the constitutional power of the president to "take care that the laws be faithfully executed."
Answer: TRUE
Explanation: Presidents claim the power to issue executive orders on the basis of their Article II, Section 3, constitutional power to "take care that the laws be faithfully executed."
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
15) "Legal positivism" is also known as "natural law."
Answer: FALSE
Explanation: The term "natural law" describes certain ethical laws and principles believed to be morally right and "above" the laws devised by humans whereas the term "legal positivism" focuses on obedience to duly authorized law.
Difficulty: 2 Medium
Topic: Sources of Business Law; Schools of Jurisprudence
Learning Objective: 01-06 Identify the various schools of jurisprudence.
Bloom's: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
16) Miko comes to Jamal's law office to ask him about the law in regard to dogs running at large in her neighborhood. Jamal tells Miko that he will research the issue and get back to her. Where should Jamal look first in order to locate applicable law?
A) Restatements
B) State statutes
C) Case law
D) Uniform laws
E) Executive orders
Answer: B
Explanation: Case law is law unless revoked by new statutory law; therefore, statutory law should be consulted first.
Difficulty: 3 Hard Page Ref: 5
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
17) The president issued an executive order requiring that every citizen purchase a head of broccoli to eat once a week in order to maintain health. The executive order was challenged and the case went to the U.S. Supreme Court. The Supreme Court declared the executive order could not be enforced because it was an abuse of the president's power. What is the primary source of law the Supreme Court would interpret to determine if the executive order was enforceable?
A) The Constitution
B) State statutes
C) Case law
D) Uniform laws
E) Executive orders
Answer: A
Explanation: The primary source of law the court would examine in this case is the U.S. Constitution. Presidents claim the power to issue executive orders on the basis of Article II, Section 1 This section grants the president the power to issue directives requiring that officials in the executive branch perform their functions in a particular manner.
Difficulty: 3 Hard
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
18) Which of the following refers to the ability to understand the structure of what someone is saying and then apply a set of criteria to evaluate its worth?
A) Absolute skills
B) Critical-thinking skills
C) Cost-benefit skills
D) Reviewability skills
E) Traditional lawyer skills
Answer: B
Explanation: Success in business requires the development of critical-thinking skills - the ability to understand the structure of what someone is saying and then apply a set of criteria to evaluate its worth.
Difficulty: 2 Medium Page Ref: 12
Topic: Critical Thinking and Business Law
Learning Objective: 01-07 Outline the basic steps for applying critical thinking to business law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
19) When you read a case, you should:
A) Find the facts, look for the issue, critically think about the issue, and determine if your reasoning matches the reasoning of the judge.
B) Identify the legal issues, apply the facts to the legal issues, and evaluate the reasoning of the judge in light of the facts of the case.
C) Consider the truth of the facts of the case, identify legal questions raised, review the decision of the judge, and determine if the judge's decision was justified by the rule of law.
D) Find the facts, look for the issue, identify the judge's reason and conclusion, locate the rules of law that govern the reasoning, and apply critical thinking to the judge's reasoning.
E) Identify the facts, apply critical thinking skills to determine the truths of the facts, and identify how the judge interpreted the facts in the case.
Answer: D
Explanation: When you read a case, you should find the facts, look for the issue, identify the judge's reason and conclusion, locate the rules of law that govern the reasoning, and apply critical thinking to the judge's reasoning.
Difficulty: 2 Medium
Topic: Critical Thinking and Business Law
Learning Objective: 01-07 Outline the basic steps for applying critical thinking to business law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
20) Which areas of business law would a human resources manager find most relevant?
A) Contracts, employment and labor law, and employment discrimination
B) Contracts only
C) Contracts and labor law, but not employment discrimination
D) Employment and labor law, but not contracts
E) Human resource managers hold administrative positions and are not concerned with areas of business law
Answer: A
Explanation: Relevant areas of business law applicable to human resource management involve agency law, contracts, employment and labor law, and employment discrimination.
Difficulty: 2 Medium
Topic: An Introduction to Dynamic Business Law
Learning Objective: 01-02 Relate the functional areas of business to the relevant areas of business law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
21) Adriana Gomez is a newly hired Production Manager for ABC Corporation which manufactures wind turbines. As a new manager, ABC Corp sends Adriana to training to familiarize herself with laws that might impact her work. What laws would most likely impact a production manager?
A) White collar crime, contracts, antitrust laws
B) Tort law, environmental law, contracts
C) Antitrust law, contracts, intellectual property law
D) Property law, negotiable instruments, contracts
E) Consumer law, international law, employment law
Answer: B
Explanation: Exhibit 1-1 shows that production and transportation would most likely be impacted by tort law, contracts, environmental and consumer law.
Difficulty: 2 Medium
Topic: An Introduction to Dynamic Business Law
Learning Objective: 01-02 Relate the functional areas of business to the relevant areas of business law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
22) Which of the following entities would be responsible to make new federal laws?
A) State legislatures
B) Congress
C) Judges
D) The federal courts
E) The executive branch
Answer: B
Explanation: Federal laws are made by the federal Congress.
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
23) If someone has failed to live up to a promise made to a business organization, the business organization should:
A) Seek a legal remedy within the courts
B) Ask the lawmakers to impose a punishment upon the violation
C) Publicly shame the violator for breaking his promise
D) Turn to the executive branch to impose legal penalties
E) Ask lawmakers and the executive branch to impose consequences
Answer: A
Explanation: Laws are enforceable in the courts the community maintains.
Difficulty: 3 Hard
Topic: Law and Its Purposes
Learning Objective: 01-03 Recall the purposes of law.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
24) One purpose of the law is to:
A) Allow individuals to impose rules on others
B) Require businesses and individuals to rely on the dependability of others
C) Enable businesses and individuals to rely on the good will of one another
D) Facilitate a sense that change is possible after a rational consideration of options
E) Preserve existing social order and prevent change
Answer: D
Explanation: One purpose of the law is to facilitate a sense that change is possible, but only after a rational consideration of options.
Difficulty: 1 Easy
Topic: Law and Its Purposes
Learning Objective: 01-03 Recall the purposes of law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
25) A majority of citizens in a democracy can agree to permit certain authorities to make and enforce rules describing what behavior is permitted and encouraged in their community. These rules are what we refer to as the ________.
A) Electoral college
B) Community standard
C) Democratic validation
D) Stare decisis
E) Law
Answer: E
Explanation: A majority of citizens in a democracy can agree to permit certain authorities to make and enforce rules of behavior in their community. These rules are the law.
Difficulty: 1 Easy
Topic: Law and Its Purposes
Learning Objective: 01-03 Recall the purposes of law.
Bloom's: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
26) A new type of hydraulic fracturing ("fracking") has been implemented to help bring more natural gas to a well site. The company associated with this process has followed all federal and state guidelines associated with the process of fracking. Residents however are very unhappy and vocal about the process of fracking and fights have broken out amongst the resident's and workers. Resident's demand the company be shut down. A new law was implemented that is designed to help keep the peace yet look at alternatives to the fracking process. The purposes of the new law include:
A) Providing order, serving as a moral guide, serving as an alternative to fighting, facilitating a sense that change is possible
B) Creating enforceable rules of law which change the way that the manufacturing process must be changed
C) Providing new rules that would allow for civil disobedience
D) Setting new rules and guidelines that would allow for protests to happen on the fracking site
E) Guaranteeing the personal freedoms of the company to continue fracking as long as they were doing so within state and federal guidelines
Answer: A
Explanation: As outlined in Exhibit 1-2 this scenario represents the opportunity for businesses and communities to come together to provide order, serve as an alternative to fighting, serve as a moral guide to expectations of citizens and organizations and to facilitate a sense of change after a rational consideration of options is explored.
Difficulty: 3 Hard
Topic: Law and Its Purposes
Learning Objective: 01-03 Recall the purposes of law.
Bloom's: Evaluate
AACSB: Ethics
Accessibility: Keyboard Navigation
27) Jill hires Bob to deliver flowers to local customers. If Bob and Jill get into a dispute in regards to Bob's expenses and salary, what type of law would govern the dispute?
A) Private
B) Joint
C) Criminal
D) Public
E) Common law
Answer: A
Explanation: Private law would be used between Bob and Jill as private individuals.
Difficulty: 3 Hard
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Evaluate
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
28) If a manufacturing plant continues to allow toxins above the legal limit to escape into the atmosphere in violation of state law, which law is implicated?
A) Private
B) Common law
C) Criminal
D) Public
E) Black letter
Answer: D
Explanation: Public law controls disputes between private individuals and their government or between groups and their government.
Difficulty: 3 Hard
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Evaluate
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
29) ________ law cases involve either two individuals or two organizations.
A) Civil
B) Legal realism
C) Criminal
D) Precedent
E) Public
Answer: A
Explanation: Civil law cases are between either two individuals or two organizations.
Difficulty: 2 Medium
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
30) After a court action brought by Mary, Mary was awarded $1,000 in damages from Stanley because she proved by a preponderance of the evidence that Stanley damaged her bicycle. What type of law applied to Mary's case that resulted in her being awarded $1,000?
A) Criminal
B) Procedural
C) Civil
D) Natural
E) Positive
Answer: C
Explanation: Civil law lays out the rights and responsibilities implied in relationships between persons and their government. Because Mary brought the court action and was awarded compensation only after proving her case by a preponderance of the evidence, it is clear that this was a civil case.
Difficulty: 2 Medium
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
31) Tim decides that he is in desperate need of money and decides to rob a bank. He is caught and arrested. What type of law would be applied to him when brought to trial?
A) Civil
B) Procedural
C) Tort
D) Consumer
E) Criminal
Answer: E
Explanation: If someone commits an act against society as a whole, criminal laws regulate how a person will be tried.
Difficulty: 2 Medium
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
32) If a victim of assault does not want the abuser arrested but the prosecutor brings charges anyway since the assault violated criminal laws, the reason for the prosecutor's actions is:
A) A violation of criminal laws is an act against the public as a whole.
B) The abuser has committed a civil law violation in addition to a criminal one.
C) Private law has been violated and the prosecutor has a duty to act.
D) Natural law has been violated and the prosecutor has a duty to act.
E) The prosecutor's responsibility is to regulate disputes between private individuals under criminal law.
Answer: A
Explanation: Criminal law regulates incidents in which someone commits an act against the public as a whole.
Difficulty: 3 Hard
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
33) A national restaurant chain must pay damages for breach of contract to a cooking oil supplier. What type of law is involved?
A) Public law only
B) Private law only
C) Civil law only
D) Public, private, and civil law
E) Private law and civil law
Answer: E
Explanation: Civil law identifies the remedies available when someone's rights are violated, and private law regulates disputes between private individuals or groups.
Difficulty: 3 Hard
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Evaluate
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
34) Some laws have been adopted to help business conduct business online. Cyberlaw is based primarily on ________.
A) International law
B) Administrative law
C) Existing law
D) Natural
E) Positive
Answer: C
Explanation: Though new law has been adopted to regulate business activities online, most cyber law is based primarily on the existing laws.
Difficulty: 3 Hard
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Evaluate
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
[The Stolen Laptop] Ricardo told Ashley that Bob stole her laptop computer from her car. The next day, Ashley confronted Bob and slapped him for stealing her laptop. Bob had Ashley arrested for slapping him, and the local district attorney prepared to prosecute Ashley on behalf of the state. Ashley sued Bob for damages to the laptop and for maliciously having her arrested. Bob also sued Ricardo for defamation, claiming Ricardo lied to Ashley about Bob stealing the laptop.
35) Which statements are true regarding Ashley's claim against Bob for damages involving the laptop and her claim that Bob maliciously had her arrested?
A) The claim for damages involving the laptop and also the claim that Bob maliciously had her arrested are civil claims involving private law.
B) The claim for damages involving the laptop is a civil claim involving private law, but the claim that Bob maliciously had her arrested is a civil claim involving public law.
C) The claim for damages involving the laptop is a civil claim involving private law, but the claim that Bob maliciously had her arrested is a criminal claim involving public law.
D) The claim for damages involving the laptop is a civil claim involving private law, but the claim that Bob maliciously had her arrested is a criminal claim involving private law.
E) The claim for damages involving the laptop and also the claim that Bob maliciously had her arrested are criminal claims involving private law.
Answer: A
Explanation: Private law regulates disputes between private individuals or groups, and civil law delineates the rights and responsibilities implied in relationships between persons.
Difficulty: 3 Hard Page Ref: 2
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
36) Which of the following would be involved in the prosecution of Ashley for slapping Bob?
A) Public law and criminal law
B) Private law and criminal law
C) Private law and civil law
D) Public law and civil law
E) Civil law and criminal law
Answer: A
Explanation: Public law controls disputes between private individuals or groups and their government; and criminal law cases are prosecuted not by individuals but by the state, federal, or local government.
Difficulty: 3 Hard Page Ref: 2
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
37) Bob's action against Ricardo for defamation involves which types of law?
A) Criminal law and public law
B) Civil law and public law
C) Insider law and public law
D) Civil law and private law
E) Administrative law and public law
Answer: D
Explanation: Civil law delineates the rights and responsibilities implied in relationships between persons and their government, and private law regulates disputes between private individuals or groups.
Difficulty: 3 Hard Page Ref: 2
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
[Inattentive Driving] Hannah, a first year law student, drove off campus to register for an upcoming conference. Although lawmakers in her state passed a law prohibiting the use of a cell phone while operating a motor vehicle, Hannah was doing just that. When she looked down to pick up a can of soda she dropped, Hannah crashed into the side of Dev's new convertible. A police officer down the street came over to investigate. Hannah explained to him that it was difficult to hold the cell phone in one hand, the soda in the other, and also drive. The officer was not impressed. Dev approached, furious about the significant dent in his new car. Hannah says she has insurance and that she will cover the costs of the whole incident. Dev says that is insufficient; but Hannah says that under case precedent, that is his only remedy. The officer tells Hannah that she must obey duly authorized law, and proceeds to write several citations to her.
38) What type or types of law are involved in the above situation, considering Hannah's interaction with both the officer and Dev?
A) Public law but not private law
B) Private law but not public law
C) Civil law and private law but not public law
D) Criminal law and public law but not private law
E) Public law, private law, civil law, and criminal law
Answer: E
Explanation: Private law regulates disputes between private individuals; public law controls disputes between private individuals and their government; civil law delineates the rights and responsibilities implied in relationships between persons; and criminal law regulates incidents in which someone commits an act against the public as a whole.
Difficulty: 3 Hard Page Ref: 2
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
39) The law in Hannah's state regulating using cell phones would be classified as which of the following?
A) A statute
B) A type of common law
C) An executive order
D) A uniform law
E) A negative law
Answer: A
Explanation: Statutes are rules and regulations put forth by legislatures.
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
40) Bob and Tom were in a car accident on a street within Normandy city boundaries. Bob was ticketed for driving under the influence (DUI). This was Bob's third DUI. Tom sustained bodily damages and damage to his vehicle. If Bob is sued by Tom and the city of Normandy:
A) Bob will be sued under the criminal laws only of Normandy by both parties.
B) Bob will be sued under the civil laws of Normandy only by both parties.
C) Bob will be sued by Tom under the criminal laws of Normandy and the civil laws of Normandy by the city's prosecutor.
D) Bob will be sued by Tom under the civil laws of Normandy and the criminal laws of Normandy by the city's prosecutor.
E) Only Tom would be able to be sue Bob because of the accident.
Answer: D
Explanation: Civil laws are those laws that regulate the relationships between people. Tom would sue under the civil laws of Normandy for the car accident and damages. The Normandy city prosecutor would bring suit under the criminal laws which might result in Bob's incarceration for his third infraction of DUI.
Difficulty: 3 Hard
Topic: Classification of the Law
Learning Objective: 01-04 Distinguish among types of law.
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
41) Judge Jones is reviewing a cyberbullying case in her courtroom. When Judge Jones rules, in her pronouncement of the case, she discusses the law along with the importance of social conditions behind her ruling. She also is parting from past precedents in order to follow societal values in regards to cyberbullying. Judge Jones is using which school of jurisprudence?
A) The historical school of law
B) Legal positivism
C) Natural law
D) Legal realism
E) Stare decisis
Answer: D
Explanation: The concept of legal realism is based on the fact that judges must look at more than just the law but also take into consideration the social and economic conditions. Judges who practice legal realism often depart from past court decisions because society is shifting and evolving.
Difficulty: 3 Hard
Topic: Schools of Jurisprudence
Learning Objective: 01-06 Identify the various schools of jurisprudence.
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
42) Lori and Tim are negotiating a new business deal that requires an interpretation of a law made by their state twenty years ago. Tim knows that there are cases regarding this law that have been tried in a court within their city's boundaries. If Tim relies on these cases as the law, he is referring to ________.
A) Statutory law
B) Administrative law
C) Executive orders
D) Precedent
E) Constitutional law
Answer: D
Explanation: Precedent is the interpretations made by judges which become law unless revoked later by a new statute.
Difficulty: 3 Hard
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
43) The supreme law of the land is the ________.
A) U.S. Constitution
B) Declaration of Independence
C) U.S. Code
D) Model Law
E) Uniform Code
Answer: A
Explanation: The U.S. Constitution is the supreme law of the land, the foundation for all laws in the United States.
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
44) ________ laws are those laws that are implemented by a legislative body.
A) Administrative
B) Common
C) Executive
D) Statutory
E) Natural
Answer: D
Explanation: Rules and regulations written by legislative bodies are statutory laws.
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
45) The ________ contain(s) legislative acts passed by state legislatures.
A) U.S. Code
B) State codes
C) Uniform Register
D) State Reporter
E) State Reference Manual
Answer: B
Explanation: Legislative acts are written into the appropriate state codes when they are enacted by state legislatures.
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
46) The United States Code is where you can go to find ________.
A) Laws enacted by Congress
B) Presidential Enactments
C) Laws of all 50 states
D) Federal Supreme Court cases
E) Court cases of all 50 states
Answer: A
Explanation: The U.S. Code is where you can find the legislative enactments of the U.S. Congress.
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
47) The group that urges states to enact model laws to provide greater uniformity of law is called the ________.
A) Model Law on Uniform State Laws Organization
B) Federal Uniform Law Commission
C) National Conference of Commissioners on Uniform State Laws
D) Model and Uniform Law Consortium
E) Uniform Statutory Enforcement Commission
Answer: C
Explanation: The National Conference of Commissioners on Uniform State Laws (NCC) regularly urges states to enact model laws to provide greater uniformity.
Difficulty: 2 Medium
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
48) When the organization in charge of proposing uniform laws proposes a statute, which of the following is true?
A) All states must adopt the uniform statute within one year.
B) All states must adopt the uniform statute within six months.
C) The uniform statute automatically goes into effect without any action by state legislatures.
D) A state legislature is not required to adopt the uniform statute; but if the state legislature decides to go forward with adoption, all portions of the statute must be adopted.
E) A state legislature can ignore the proposed uniform law, adopt it in full, or adopt it in part.
Answer: E
Explanation: The response to suggestions regarding uniform laws is entirely in the hands of the state legislatures, and they can ignore a suggestion or adopt part or all of the proposed model law.
Difficulty: 2 Medium Page Ref: 5
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
49) A treaty is a binding agreement between two states or between international organizations. If the executive branch negotiates a treaty it must then be approved by:
A) The House of Representatives
B) All 50 states
C) The Senate
D) The Supreme Court
E) All of Congress
Answer: C
Explanation: A treaty determines rights and obligations between two parties. If the US negotiates a treaty with another party, the treaty must then be approved by two-thirds of the members of the US Senate.
Difficulty: 2 Medium
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
50) The court hears a discrimination case in which they are asked to decide whether local anti-discrimination laws protect against a person being fired because they have red hair. The court holds that since Irish people are more likely to have red hair, this is an example of national origin discrimination and anti-discrimination laws should apply. The legislature, following the court ruling, passes a statute saying hair color is not covered by anti-discrimination laws. The legislature's action is an example of:
A) Overturning stare decisis
B) Overturning precedent
C) Revoking common law by new statutory law
D) Following precedent
E) Following stare decisis
Answer: C
Explanation: Case law, or common law, is law unless revoked later by a new statutory law.
Difficulty: 3 Hard
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
51) Judge George decides a case before his court that has the same set of facts as a case he heard four months ago. Judge George should apply ________.
A) Procedural laws
B) A different state statute
C) Restatement
D) Precedent
E) Legal realism
Answer: D
Explanation: If a case has the same set of facts and is brought before the same court again, precedent is used to help guide later decisions.
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
52) The ________ is a body of law significant to business activities including sales, banking, and warranty.
A) Federal Business Code
B) Model Business Code
C) Uniform Transactional Model
D) Uniform Commercial Code
E) Marketing Transaction Code
Answer: D
Explanation: The Uniform Commercial Code is a body of law significant for business activities including sales laws and other regulations affecting commerce, such as bank deposits and collections, title documents, and warranties.
Difficulty: 1 Easy
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
53) When courts rely on precedent, they are obeying ________.
A) Common analysis
B) Res judicata
C) Stare decisis
D) In rem process
E) Federal law
Answer: C
Explanation: When courts rely on precedent, they are obeying the principle of stare decisis ("standing by their decision"), in which rulings made in higher courts become binding precedent for lower courts.
Difficulty: 2 Medium
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
54) When a state supreme court issues a binding ruling on a matter of law, who must follow the precedent set by the state supreme court?
A) The United States Supreme Court
B) The U.S. Congress
C) State legislatures
D) Lower courts within the same state
E) All lower courts in the United States
Answer: D
Explanation: Rulings made by higher courts become binding precedent for lower courts. When an issue is brought before a state court, the court will determine whether the state supreme court has made a decision on a similar issue, which creates a binding precedent or pattern of law the lower court must follow. If there is no binding decision, state courts need to look for other rulings on similar cases. They are not bound by each other's decisions and might decide differently on the same issue.
Difficulty: 3 Hard
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
[International Expansion] Ryan wants to expand his coffee business into Winland, a small, remote country. He moves to Winland temporarily in order to oversee operations. His friend Terrell asks him if he plans to hire legal counsel for the expansion. Ryan replies, "Of course not. The U.S. has the strictest laws regarding contracts, employment, and business practices in the world. So long as I'm legal in the U.S., I'm legal anywhere. Besides, I studied up on Winland law ten years ago, and I know it all." Ryan proceeds and lands in jail in Winland for violating recently passed laws which make it a crime to mistreat employees and which criminalized the failure to provide certain benefits. Authorities in Winland claim that he sexually harassed an employee, failed to pay sufficient wages, and failed to give employees Winland's mandated 12 weeks of paid vacation per year.
55) What is true regarding Ryan's defense that he thought he knew the law of Winland because he had studied it some years before and that the laws under which he was arrested were new? (Assume the law of Winland is the same as the U.S. on this issue.)
A) Rules change and Ryan had a duty to stay current. It is not a defense that he studied the law at one time and that the laws at issue were new.
B) Ryan is entitled to rely as a defense on the fact that he had studied the law at one time. Officials in Winland were charged with publicizing any changes.
C) If Ryan can prove that the laws at issue were passed within the last twelve months before he was arrested, he will get out of jail because there is a twelve month grace period for new laws.
D) If Ryan can prove that the laws at issue were passed within the last six months before he was arrested, he will get out of jail because there is a six month grace period for new laws.
E) Ryan cannot be prosecuted so long as he was not aware he was violating the law. He did not have the requisite intent to perform a criminal act, regardless of whether the laws were new.
Answer: A
Explanation: Business managers must pay attention to changes in the law and cases in which new precedents are set and take them into account when making business decisions.
Difficulty: 3 Hard
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Apply
AACSB: Diversity
Accessibility: Keyboard Navigation
56) ________ is the type of law involved in comparing laws between the U.S. and Winland.
A) Comparative law
B) Contributory law
C) Comprehensive law
D) Complete law
E) Delineated law
Answer: A
Explanation: Ryan should understand comparative law, which studies and compares the laws in different countries.
Difficulty: 2 Medium
Topic: Schools of Jurisprudence
Learning Objective: 01-06 Identify the various schools of jurisprudence.
Bloom's: Understand
AACSB: Diversity
Accessibility: Keyboard Navigation
57) Regarding Ryan's legal problems in Winland, which is a true statement?
A) Ryan can rely upon the federal statutory laws of the U.S. as a defense but not the U.S. Constitution.
B) Ryan is entitled to all U.S. Constitutional rights in Winland because he is a U.S. citizen, but he cannot rely on statutory law.
C) Ryan can rely on U.S. laws as a defense only if he obtains an opinion from the office of the U.S. attorney that his operations in the U.S. have strictly complied with the law.
D) Ryan must obey the laws of Winland when operating a business in Winland and cannot rely upon U.S. laws as a defense.
E) Ryan can rely upon the federal statutory laws of the U.S. as a defense. Additionally, Ryan is entitled to all U.S. Constitutional rights in Winland because he is a U.S. citizen.
Answer: D
Explanation: Ryan should understand comparative law; and to do business in another country, Ryan must conform to that country's standards.
Difficulty: 3 Hard
Topic: Schools of Jurisprudence
Learning Objective: 01-06 Identify the various schools of jurisprudence.
Bloom's: Apply
AACSB: Diversity
Accessibility: Keyboard Navigation
58) Which of the following cases overturned prior precedent?
A) Brown v. Board of Education
B) Wygant v. Jackson Board of Education
C) Planned Parenthood of Southeastern Pennsylvania v. Casey
D) Plessy v. Ferguson
E) Precedent cannot be overturned
Answer: A
Explanation: Brown v. Board of Education did not follow the precedent established by Plessy v. Ferguson on issues involving segregation.
Difficulty: 3 Hard
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Diversity
Accessibility: Keyboard Navigation
59) Which of the following is true regarding administrative agencies?
A) There are state administrative agencies, but no federal administrative agencies.
B) There are federal administrative agencies, but no state administrative agencies.
C) There are state and federal administrative agencies, but no local administrative agencies.
D) Administrative agencies exist only at the local county level.
E) Administrative agencies exist at the federal, state, and local level.
Answer: E
Explanation: The federal, state, and local governments have dozens of administrative agencies.
Difficulty: 1 Easy Page Ref: 7
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
60) Which of the following is true regarding treaties at the federal level?
A) A treaty is generally negotiated by the executive branch and must then be approved by two-thirds of the Senate.
B) A treaty is generally negotiated by the executive branch and must then be approved by two-thirds of the House of Representatives.
C) A treaty is generally negotiated by the executive branch and must then be approved by two-thirds of the Senate and also by two-thirds of the House of Representatives.
D) A treaty is generally negotiated by the executive branch and no approval by the Senate or House of Representatives is needed.
E) A treaty is generally negotiated by the executive branch and must then be approved by two-thirds of the Senate and also by two-thirds of the state legislatures.
Answer: A
Explanation: In the United States, a treaty is generally negotiated by the executive branch; and, in order to be binding, it must then be approved by two-thirds of the Senate.
Difficulty: 2 Medium Page Ref: 8
Topic: Sources of Business Law
Learning Objective: 01-05 Differentiate between sources of the law.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
61) Judge Bob rules on a case in his state. A case in a neighboring state has the exact same facts. Judge Judy, when referring to Judge Bob's case
A) Must follow the case as precedent
B) Must follow the case as precedent but only if the law is exactly the same in her state
C) May be influenced by the ruling but is not obligated to follow it
D) Would have to seek guidance on whether or not she must follow it from a higher court in her jurisdiction
E) Would need to seek guidance from a federal court in order to determine if she is obligated to follow Judge Bob's ruling
