TEST BANK
The Legal and Regulatory Environment of Business
by O. Lee Reed, Peter Shedd
16th Edition
N
U
R
SE
D
O
C
S
, 1
Student: ___________________________________________________________________________
1. Law and "rule of law" are synonymous terms.
True False
2. The first known written set of laws was the Code of Hammurabi.
True False
3. Rule-of-law nations adopt laws supporting the private market because it is in everyone's interest,
including the lawmakers'.
True False
4. Common property, applies to public resources owned by the government (or "state") like roads, public
N
buildings, public lands, and monuments.
True False
U
5. Contract law compensates owners whose resources are wrongfully harmed by the actions of others.
True False
6. The secret to economic prosperity and the wealth of nations lies in the foundation of property law and the
R
legal system to implement it under the rule of law.
True False
7. Jurisprudence is the rule of law.
SE
True False
8. Natural law theory asserts that law contains universal moral principles.
True False
9. Sociological jurisprudence emphasizes that contemporary law should focus on legal principles that have
D
withstood the test of time in a nation.
True False
10. Jurisprudence refers to the general body of law interpretations by judges as different from legislation
O
passed by legislators.
True False
11. Legal realism is the idea that courts should understand the meaning of the Constitution relative to the
C
times in which they interpret it.
True False
12. The United Kingdom, the United States, Canada, Jamaica, India, Nigeria, New Zealand, and a few other
S
countries—all colonized by England—follow the common law.
True False
13. Civil law arose in the eleventh and twelfth centuries as the English monarch appointed royal judges
to ride circuits around the English countryside and to resolve disputes in the name of the king (or
queen).
True False
14. Louisiana is the only state in the U.S. that follows a partial civil law system due to Louisiana's historical
ties with France, a civil law nation.
True False
15. Common law relies more on legislation than judicial decisions to determine what the law is.
True False
,16. In administrative law, a government official represents society, or "the people," and the official is
responsible for seeking justice to achieve the ends of society.
True False
17. Although property law is categorized as one kind of private law; in our legal system, it is at the heart of
both public and private law.
True False
18. Contract law often but not always requires actual injury to the owner's resources.
True False
19. Legislation passed by the Congress is called a statute or an act.
True False
20. The Second Amendment to the Constitution holds that "No State shall . . . deprive any person of life,
liberty or property without due process of law."
True False
N
21. Disadvantages of case law do not destroy the benefits of certainty, predictability, and stability provided
by case law and stare decisis.
True False
U
22. Judges in future cases are not so likely to follow the dicta in prior cases as they are the holdings.
True False
R
23. Conflicting precedents when applying the principle of stare decisis do not create confidence in the
certainty of law.
True False
SE
24. With reference to the hierarchy of sources of law, Case law prevails over local ordinances.
True False
25. The Fourteenth Amendment to the Constitution recognizes that the law is enforced by taking a person's
life, freedom, or the resources that he or she owns.
True False
D
26. Whether it's stated in the contract or not, when a breach of contract occurs, the injured party will usually
recover her attorney fees as part of her compensatory damages.
True False
O
27. The single largest number of lawsuits today, especially in the federal courts, involves one business suing
another business for tortious conduct.
C
True False
28. Tort law helps protect property boundaries by providing compensation when someone wrongfully crosses
such boundaries.
S
True False
29. In addition to compensatory damages, breach-of-contract cases may award punitive damages, when the
breaching party knew or had reason to know that special circumstances existed that would cause the other
party to suffer additional losses if the contract were breached.
True False
30. Drake verbally lashes out at his neighbor one evening following a drunken party. He also beats him up
when Drake tries to back away from the argument. He is said to have committed a strict liability tort.
True False
31. Corporate governance can fail even when corporate managers do nothing illegal.
True False
, 32. Article 6 of the Treaty on European Union, called the Maastricht Treaty, says the EU is "founded"
on:
A. specific performance.
B. private markets.
C. stare decisis.
D. rule of law.
E. property.
33. Economic growth depends "in particular on the rule of law" which is a "lodestar for all countries." Why?
A. Rule-of-law nations adopt laws supporting the private market because it is in everyone's interest,
including the lawmakers'.
B. It distinguishes lawmakers as being above the rule of law.
C. It allows special interest groups to benefit at the expense of others.
D. It adopts laws supporting the growth of the public markets over private markets increasing economic
growth of nations.
N
E.It removes the power of the courts and creates an autocratic regime where businesses can freely invest
and economic growth is high.
34. _____ property is an ownership fence which applies to resources like land that more than one individual
U
owns jointly.
A. Private
B. Civil
R
C. Public
D. Common
E. Tort
SE
35. A property based legal system:
A. is unimportant in Western legal systems.
B. protects and assists the wealthy over the poor.
C. applies only to common property or resources like land that more than one individual owns jointly.
D. does not allow for the transfer of private resources.
E. allows people to exclude others from interfering with what their efforts produce.
D
36. _____ can be thought of as the central concept underlying Western legal systems.
A. Rule of law
B. Property
O
C. Tort law
D. Ethics
E. Stare decisis
C
37. Contract law:
A. enables an owner to exchange resources, especially at a future date.
B. compensates owners whose resources are wrongfully harmed by the actions of others.
S
C. punishes those who harm an owner's resources in particular ways.
D. identifies how individuals can own and use private resources in groups.
E. protects ownership and sets limits on private resource use.
38. _____ law both protects ownership and sets limits on private resource use.
A. Tort
B. Antitrust
C. Securities
D. Regulatory
E. Contract
The Legal and Regulatory Environment of Business
by O. Lee Reed, Peter Shedd
16th Edition
N
U
R
SE
D
O
C
S
, 1
Student: ___________________________________________________________________________
1. Law and "rule of law" are synonymous terms.
True False
2. The first known written set of laws was the Code of Hammurabi.
True False
3. Rule-of-law nations adopt laws supporting the private market because it is in everyone's interest,
including the lawmakers'.
True False
4. Common property, applies to public resources owned by the government (or "state") like roads, public
N
buildings, public lands, and monuments.
True False
U
5. Contract law compensates owners whose resources are wrongfully harmed by the actions of others.
True False
6. The secret to economic prosperity and the wealth of nations lies in the foundation of property law and the
R
legal system to implement it under the rule of law.
True False
7. Jurisprudence is the rule of law.
SE
True False
8. Natural law theory asserts that law contains universal moral principles.
True False
9. Sociological jurisprudence emphasizes that contemporary law should focus on legal principles that have
D
withstood the test of time in a nation.
True False
10. Jurisprudence refers to the general body of law interpretations by judges as different from legislation
O
passed by legislators.
True False
11. Legal realism is the idea that courts should understand the meaning of the Constitution relative to the
C
times in which they interpret it.
True False
12. The United Kingdom, the United States, Canada, Jamaica, India, Nigeria, New Zealand, and a few other
S
countries—all colonized by England—follow the common law.
True False
13. Civil law arose in the eleventh and twelfth centuries as the English monarch appointed royal judges
to ride circuits around the English countryside and to resolve disputes in the name of the king (or
queen).
True False
14. Louisiana is the only state in the U.S. that follows a partial civil law system due to Louisiana's historical
ties with France, a civil law nation.
True False
15. Common law relies more on legislation than judicial decisions to determine what the law is.
True False
,16. In administrative law, a government official represents society, or "the people," and the official is
responsible for seeking justice to achieve the ends of society.
True False
17. Although property law is categorized as one kind of private law; in our legal system, it is at the heart of
both public and private law.
True False
18. Contract law often but not always requires actual injury to the owner's resources.
True False
19. Legislation passed by the Congress is called a statute or an act.
True False
20. The Second Amendment to the Constitution holds that "No State shall . . . deprive any person of life,
liberty or property without due process of law."
True False
N
21. Disadvantages of case law do not destroy the benefits of certainty, predictability, and stability provided
by case law and stare decisis.
True False
U
22. Judges in future cases are not so likely to follow the dicta in prior cases as they are the holdings.
True False
R
23. Conflicting precedents when applying the principle of stare decisis do not create confidence in the
certainty of law.
True False
SE
24. With reference to the hierarchy of sources of law, Case law prevails over local ordinances.
True False
25. The Fourteenth Amendment to the Constitution recognizes that the law is enforced by taking a person's
life, freedom, or the resources that he or she owns.
True False
D
26. Whether it's stated in the contract or not, when a breach of contract occurs, the injured party will usually
recover her attorney fees as part of her compensatory damages.
True False
O
27. The single largest number of lawsuits today, especially in the federal courts, involves one business suing
another business for tortious conduct.
C
True False
28. Tort law helps protect property boundaries by providing compensation when someone wrongfully crosses
such boundaries.
S
True False
29. In addition to compensatory damages, breach-of-contract cases may award punitive damages, when the
breaching party knew or had reason to know that special circumstances existed that would cause the other
party to suffer additional losses if the contract were breached.
True False
30. Drake verbally lashes out at his neighbor one evening following a drunken party. He also beats him up
when Drake tries to back away from the argument. He is said to have committed a strict liability tort.
True False
31. Corporate governance can fail even when corporate managers do nothing illegal.
True False
, 32. Article 6 of the Treaty on European Union, called the Maastricht Treaty, says the EU is "founded"
on:
A. specific performance.
B. private markets.
C. stare decisis.
D. rule of law.
E. property.
33. Economic growth depends "in particular on the rule of law" which is a "lodestar for all countries." Why?
A. Rule-of-law nations adopt laws supporting the private market because it is in everyone's interest,
including the lawmakers'.
B. It distinguishes lawmakers as being above the rule of law.
C. It allows special interest groups to benefit at the expense of others.
D. It adopts laws supporting the growth of the public markets over private markets increasing economic
growth of nations.
N
E.It removes the power of the courts and creates an autocratic regime where businesses can freely invest
and economic growth is high.
34. _____ property is an ownership fence which applies to resources like land that more than one individual
U
owns jointly.
A. Private
B. Civil
R
C. Public
D. Common
E. Tort
SE
35. A property based legal system:
A. is unimportant in Western legal systems.
B. protects and assists the wealthy over the poor.
C. applies only to common property or resources like land that more than one individual owns jointly.
D. does not allow for the transfer of private resources.
E. allows people to exclude others from interfering with what their efforts produce.
D
36. _____ can be thought of as the central concept underlying Western legal systems.
A. Rule of law
B. Property
O
C. Tort law
D. Ethics
E. Stare decisis
C
37. Contract law:
A. enables an owner to exchange resources, especially at a future date.
B. compensates owners whose resources are wrongfully harmed by the actions of others.
S
C. punishes those who harm an owner's resources in particular ways.
D. identifies how individuals can own and use private resources in groups.
E. protects ownership and sets limits on private resource use.
38. _____ law both protects ownership and sets limits on private resource use.
A. Tort
B. Antitrust
C. Securities
D. Regulatory
E. Contract
