Chapter 1
Introduction to Law
True/False Questions
1. Businesspersons do not need to understand the legal environment, because that is why
attorneys can be hired.
False; Easy
2. Precedents are existing interpretations of law, based upon prior decisions, which create
predictability and stability.
True; Easy
3. Filing a frivolous lawsuit is a guaranteed way to get rich quick.
False; Easy
4. The law is a dynamic, ever-changing, sophisticated field of study.
True; Easy
5. It makes the most economic sense to do business within the parameters of law.
True; Easy
6. At a most basic interpretation, most people believe that law is simply subordination.
False; Easy
7. Many laws rely on economic incentives, rather than force of power, to encourage
compliance.
True; Moderate
8. Insider trading is the use of public information to buy or sell a stock to make money.
False; Easy
9. Legal positivists believe that the law is the human created, actual written words of the
law, and nothing more.
True; Moderate
,10. Legal realists believe that the written words of the law are less important than the
person who is in the position to enforce the law.
True; Easy
11. Natural law is a belief that the scientific method should be used to resolve legal
disputes.
False; Easy
12. Viewing a legal matter through different theories of jurisprudence always results in the
same outcome, regardless of which theory of jurisprudence is used.
False; Moderate
13. A law review or journal article is a primary source of law.
False; Moderate
14. Secondary sources of law are created by a recognized, legitimate law-creating authority
rather than by legal scholars.
False; Moderate
15. Statutory law is law created by the U.S. Constitution.
False; Moderate
16. Public law applies only to people who work in public positions, such as people who
work for the government.
False; Moderate
17. Private law is binding only upon specific parties.
True; Easy
18. Procedural law refers to the actual substance of the law or the merits of the claim, case,
or action.
False; Easy
19. Substantive law describes the legal rules that must be followed.
False; Easy
,20. The U.S. Constitution is an interesting historical document that is not relevant to the
structure of the federal government today.
False; Easy
21. The first ten amendments to the U.S. Constitution are known as the Bill of Rights.
True; Easy
22. The original purpose of the Bill of Rights was to reserve certain powers to the
government.
False; Moderate
23. The dual system of government in the United States is called federalism.
True; Easy
24. Congress can veto a bill passed by the President.
False; Moderate
25. A primary source of law is an actual source of law.
True; Easy
26. The rule of law is a system of laws under which the people and the government are
bound, which allows predictability and restraint of government action.
True; Easy
27. The Founding Fathers of the United States rejected inclusion of concepts from all prior
forms of government when writing the U.S. Constitution, because none of the prior
governments ever worked.
False; Moderate
28. The English Bill of Rights of 1689 contains the basis for many concepts contained in the
U.S. Constitution.
True; Moderate
29. Constitutional law is a type of federal law, but not a type of state law.
False; Easy
, 30. The recognition of the right to govern provides legitimacy, and in the Magna Carta these
rights are derived from religious authority.
True; Moderate
31. An ex post facto law is a type of law that is applied retroactively to its passage.
True; Easy
32. The rule of law provides protection for property.
True; Easy
33. If you sell firearms in a retail capacity, you would be subject to both state and federal
laws.
True; Easy
34. Under the Uniform Commercial Code (UCC), merchants are governed by a set of rules
that anticipate and allow for flexibility in contractual terms, to facilitate business needs.
True; Moderate
35. Congress has enacted antitrust legislation that precludes anticompetitive practices, such
as colluding and price fixing.
True; Easy
36. Understanding the legal environment can help businesspeople minimize exposure to
liability.
True; Easy
37. Largely as a result of the fallout from the Enron case, Congress passed the Emergency
Economic Stabilization Act.
False; Easy
38. A Ponzi scheme type is also known as a pyramid scheme.
False; Moderate
39. The Truth in Lending Act is a state statute that requires lenders to provide accurate
information concerning costs involved in offers of credit.
False; Moderate
40. Marketers must be particularly attuned to tort law.
True; Easy
Multiple Choice Questions
Introduction to Law
True/False Questions
1. Businesspersons do not need to understand the legal environment, because that is why
attorneys can be hired.
False; Easy
2. Precedents are existing interpretations of law, based upon prior decisions, which create
predictability and stability.
True; Easy
3. Filing a frivolous lawsuit is a guaranteed way to get rich quick.
False; Easy
4. The law is a dynamic, ever-changing, sophisticated field of study.
True; Easy
5. It makes the most economic sense to do business within the parameters of law.
True; Easy
6. At a most basic interpretation, most people believe that law is simply subordination.
False; Easy
7. Many laws rely on economic incentives, rather than force of power, to encourage
compliance.
True; Moderate
8. Insider trading is the use of public information to buy or sell a stock to make money.
False; Easy
9. Legal positivists believe that the law is the human created, actual written words of the
law, and nothing more.
True; Moderate
,10. Legal realists believe that the written words of the law are less important than the
person who is in the position to enforce the law.
True; Easy
11. Natural law is a belief that the scientific method should be used to resolve legal
disputes.
False; Easy
12. Viewing a legal matter through different theories of jurisprudence always results in the
same outcome, regardless of which theory of jurisprudence is used.
False; Moderate
13. A law review or journal article is a primary source of law.
False; Moderate
14. Secondary sources of law are created by a recognized, legitimate law-creating authority
rather than by legal scholars.
False; Moderate
15. Statutory law is law created by the U.S. Constitution.
False; Moderate
16. Public law applies only to people who work in public positions, such as people who
work for the government.
False; Moderate
17. Private law is binding only upon specific parties.
True; Easy
18. Procedural law refers to the actual substance of the law or the merits of the claim, case,
or action.
False; Easy
19. Substantive law describes the legal rules that must be followed.
False; Easy
,20. The U.S. Constitution is an interesting historical document that is not relevant to the
structure of the federal government today.
False; Easy
21. The first ten amendments to the U.S. Constitution are known as the Bill of Rights.
True; Easy
22. The original purpose of the Bill of Rights was to reserve certain powers to the
government.
False; Moderate
23. The dual system of government in the United States is called federalism.
True; Easy
24. Congress can veto a bill passed by the President.
False; Moderate
25. A primary source of law is an actual source of law.
True; Easy
26. The rule of law is a system of laws under which the people and the government are
bound, which allows predictability and restraint of government action.
True; Easy
27. The Founding Fathers of the United States rejected inclusion of concepts from all prior
forms of government when writing the U.S. Constitution, because none of the prior
governments ever worked.
False; Moderate
28. The English Bill of Rights of 1689 contains the basis for many concepts contained in the
U.S. Constitution.
True; Moderate
29. Constitutional law is a type of federal law, but not a type of state law.
False; Easy
, 30. The recognition of the right to govern provides legitimacy, and in the Magna Carta these
rights are derived from religious authority.
True; Moderate
31. An ex post facto law is a type of law that is applied retroactively to its passage.
True; Easy
32. The rule of law provides protection for property.
True; Easy
33. If you sell firearms in a retail capacity, you would be subject to both state and federal
laws.
True; Easy
34. Under the Uniform Commercial Code (UCC), merchants are governed by a set of rules
that anticipate and allow for flexibility in contractual terms, to facilitate business needs.
True; Moderate
35. Congress has enacted antitrust legislation that precludes anticompetitive practices, such
as colluding and price fixing.
True; Easy
36. Understanding the legal environment can help businesspeople minimize exposure to
liability.
True; Easy
37. Largely as a result of the fallout from the Enron case, Congress passed the Emergency
Economic Stabilization Act.
False; Easy
38. A Ponzi scheme type is also known as a pyramid scheme.
False; Moderate
39. The Truth in Lending Act is a state statute that requires lenders to provide accurate
information concerning costs involved in offers of credit.
False; Moderate
40. Marketers must be particularly attuned to tort law.
True; Easy
Multiple Choice Questions
