Business Law Text and Cases 16th Edition by Kenneth W. Clarkson Test Bank

Test Bank

,Name: Class: Date:

Chapter 01 Law and Legal Reasoning
True / False

1. Law consists of enforceable rules governing relationships among individuals and between individuals and their society.
a. True
b. False
ANSWER: True

2. Because laws may change, the ability to analyze and evaluate the legal ramifications of situations as they arise is a
lasting skill.
a. True
b. False
ANSWER: True

3. The study of business law involves an ethical dimension.
a. True
b. False
ANSWER: True

4. Compartmentalizing the law into discrete topics indicates that each business transaction is subject to only one specific
area of the law.
a. True
b. False
ANSWER: False

5. A constitution is a primary source of law.
a. True
b. False
ANSWER: True

6. A legal encyclopedia is a secondary source of law.
a. True
b. False
ANSWER: True

7. A secondary source of law establishes the law on a particular issue.
a. True
b. False
ANSWER: False

8. Courts often refer to secondary sources of law for guidance in interpreting and applying a primary source of law.
a. True
b. False
ANSWER: True

9. Even if it conflicts with the U.S. Constitution, a state constitution is supreme within that state’s borders.

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,Name: Class: Date:

Chapter 01 Law and Legal Reasoning

a. True
b. False ANSWER: False

10. The U.S. Constitution is the basis of all law in the United States.
a. True
b. False
ANSWER: True

11. A state legislature has the option of adopting or rejecting a uniform law.
a. True
b. False
ANSWER: True

12. A local ordinance commonly has to do with a matter concerning only a local governing unit.
a. True
b. False
ANSWER: True

13. A federal statute applies only to those states that agree to apply it within their borders.
a. True
b. False ANSWER: False

14.Congressorastatelegislatureestablishesanadministrativeagencytoperformaspecificfunction.
a. True
b. False
ANSWER: True

15. Independent regulatory agencies are subject to the authority of the president.
a. True
b. False
ANSWER: True

16. Rules issued by administrative agencies affect almost every aspect of a business’s operations.
a. True
b. False
ANSWER: True

17. Federal agency regulations take precedence over conflicting state regulations.
a. True
b. False
ANSWER: True

18.Administrativelawplaysarelativelyinsignificantroleintheregulatoryenvironmentofbusiness.



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, Name: Class: Date:

Chapter 01 Law and Legal Reasoning

a. True
b. False
ANSWER: False

19. The doctrines and principles announced in court decisions govern all areas not covered by statutory or administrative
law.
a. True
b. False
ANSWER: True

20. A court should overturn its precedents only when there is a compelling reason to do so.
a. True
b. False
ANSWER: True

21. Controlling precedents are binding authorities.
a. True
b. False
ANSWER: True

22. A case of first impression is any legal authority or source of law that a court may look to for guidance but need not
follow when making its decision.
a. True
b. False
ANSWER: False

23. Often, more than one rule of law will be applicable to a case.
a. True
b. False
ANSWER: True

24. There is one right answer to every legal question.
a. True
b. False
ANSWER: False

25. Because courts of law and equity have merged, the principles of equity are no longer applied.
a. True
b. False
ANSWER: False

26. With respect to the study of jurisprudence, there is essentially one school of legal thought.
a. True
b. False
ANSWER: False
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