SOLUTIONS MANUAL Introduction to Business Law 7/E Jeffrey Beatty
Chapter 01: Introduction to Law
Table of Contents
Answers to Matching Questions ..................................................................................................... 1
Answers to True/False Questions ................................................................................................... 1
Answers to Multiple Choice Questions .......................................................................................... 2
Answers to Case Questions ............................................................................................................. 3
Answers to Discussion Questions ................................................................................................... 4
Answers to Matching Questions
_____A. Statute 1. Law created by judges
_____B. Administrative agencies 2. Let the decision stand
_____C. Common law 3. A law passed by Congress or a state legislature
_____D. Stare decisis 4. The supreme law of the land
_____E. United States Constitution 5. The IRS, the EPA, the FCC, the SEC
Answers:
A. 3
B. 5
C. 1
D. 2
E. 4
Answers to True/False Questions
1. If the president vetoes a bill, it can still become a statute if the House and the Senate
approve it by a two-thirds majority.
Answer: T
2. Civil lawsuits are brought to court by the injured party, but criminal cases must be
prosecuted by the government.
Answer: T
3. Federalism means that the federal government’s laws and policies always supersede those
of the states.
Answer: F
4. The federal government has three branches: executive, legislative, and administrative.
Answer: F
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, 5. Law is different from morality, but the two are closely linked.
Answer: T
Answers to Multiple Choice Questions
1. More U.S. law originates from one country than from any other. Which country?
A. France
B. England
C. Germany
D. Spain
E. Canada
Answer: B. England
2. Under the United States Constitution, power that is not expressly given to the federal
government is retained by:
A. the courts.
B. the Congress.
C. the Founders.
D. the states and the people.
E. international treaty.
Answer: D. the states and the people.
3. Judges use precedent to create what kind of law?
A. Common law
B. Statutes
C. National Law
D. Local law
E. Empirical law
Answer: A. Common law
4. For a statute to become law, Congress must pass it by a:
I. Majority vote in the House.
II. Majority vote in the Senate.
III. Two-thirds vote in the House, but only if the president has first vetoed it.
IV. Two-thirds vote in the Senate, but only if the president has first vetoed it.
A. Just I and II
B. Just III and IV
C. All of these
D. None of these
Answer: C. All of these
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, 5. What part of the Constitution addresses most basic liberties?
A. Article I
B. Article II
C. Article III
D. The amendments
Answer: D. The amendments
Answers to Case Questions
1. Union organizers at a hospital wanted to distribute leaflets to potential union members, but
hospital rules prohibited leafleting in areas of patient care, hallways, cafeterias, and any
areas open to the public. The National Labor Relations Board (NLRB) ruled that these
restrictions violated the law and ordered the hospital to permit the activities in the cafeteria
and coffee shop. The NLRB cannot create common law or statutory law. What kind of law
was it creating?
Solution
Administrative law. As an administrative agency, the NLRB has the authority and jurisdiction
to create such regulations in furtherance of its agency mission and mandate.
2. The stock market crash of 1929 and the Great Depression that followed were caused in part
because so many investors blindly put their money into stocks they knew nothing about.
During the 1920s, it was often impossible for an investor to find out what a corporation was
planning to do with its money, who was running the corporation, and many other vital facts.
Congress responded by passing the Securities Act of 1933, which required a corporation to
divulge more information about itself before it could seek money for a new stock issue.
What kind of law did Congress create? Explain the relationship between voters, Congress,
and the law.
Solution
Congress created a statutory law, as authorized by Article II of the Constitution. As for the
relationship between voters, Congress, and the law, students may posit that voters elect to
Congress members who agree with what they believe, or at least, hope to do so. But of
course, answers will vary. Voters who are disappointed in what their representatives have
done may vote them out at the next opportunity.
3. ETHICS The greatest of all Chinese lawgivers, Confucius, did not esteem written laws. He
believed that good rulers were the best guarantee of justice. Does our legal system rely
primarily on the rule of law or the rule of people? Which do you instinctively trust more?
Solution
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, Hopefully, students will recognize that the rule of law provides more safety, security, and
justice than a reliance on the current ruler. But as to which they instinctively trust more,
answers will vary.
4. Lance, who is a hacker, stole 15,000 credit card numbers and sold them on the black market,
making millions. Police caught Lance, and two legal actions followed, one civil and one
criminal. Who will be responsible for bringing the civil case? What will be the outcome if the
jury believes that Lance was responsible for identity thefts? Who will be responsible for
bringing the criminal case? What will be the outcome if the jury believes that Lance stole the
numbers?
Solution
The civil cases will be brought by the victims of identity theft, and the outcome of a
successful case against Lance would be some type of monetary award for damages suffered.
The criminal case will be brought by state prosecutors and the outcome would be
imprisonment for Lance.
5. In 2015, terrorists in Paris killed 130 people in a series of coordinated attacks at restaurants,
a soccer match, and a rock concert. The father of an American woman killed in the Paris
terrorist attacks sued Twitter, Facebook, and YouTube, alleging the sites knowingly allowed
terrorists to recruit members, raise money, and spread extremist propaganda. The sites
defended themselves by saying that their policies prohibit terrorist recruitment and that,
when alerted to it, they quickly remove offending videos. What type of lawsuit is this –
criminal or civil? What responsibilities, if any, should social media sites have for the spread of
terrorism?
Solution
The case is a civil case, but answers will vary as to the scope of the responsibilities social
media sites should have for the spread of terrorism.
Answers to Discussion Questions
1. Do you believe that there are too many lawsuits in the United States? If so, do you place
more blame for the problem on lawyers or on individuals who sue? What evidence do you
have for your opinion?
Solution
Answers will vary.
2. In the 1980s, the Supreme Court ruled that it is legal for protesters to burn the American
flag. This activity counts as free speech under the Constitution. If the Court hears a new flag-
burning case in this decade, should it consider changing its ruling or should it follow
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