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Test Bank For Business Law A Storytelling Approach, 1st Edition by Michael Fricke Chapter 1-39
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Test Bank For Business Law A Storytelling Approach, 1st Edition by Michael Fricke Chapter 1-39
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Business Law: A Storytelling Approach, 1e (Fricke) ALL CHAPTERSChapter 1 Sources of Laws
ANSWERS INCLUDED
1) Multiple individuals and entities create the laws that govern American businesses.
Answer: TRUE
Explanation: The United States has shared governance between federal and state authorities.
The courts also set out law through case law.
Learning Objective: 1.1
Skill: Comprehension
AACSB: Application of Knowledge
2) A state law that contradicts the U.S. Constitution is valid because the states have the right to
regulate their own citizens.
Answer: FALSE
Explanation: The Constitution is the supreme Law of the Land and overrides all lower laws.
Learning Objective: 1.1
Skill: Comprehension
AACSB: Application of Knowledge
3) A federal treaty has the force of law throughout the country.
Answer: TRUE
Explanation: Federal treaties are fully binding on the states.
Learning Objective: 1.1
Skill: Comprehension
AACSB: Application of Knowledge
4) U.S. law is an example of a purely common law system.
Answer: FALSE
Explanation: The United States blends statutory and common law.
Learning Objective: 1.1
Skill: Comprehension
AACSB: Application of Knowledge
5) The concept of judicial review, which stems from the case Marbury v. Madison, allows the
Supreme Court to provide a check on congressional action, but not executive action.
Answer: FALSE
Explanation: Judicial review allows the courts to evaluate both legislative and executive action
for constitutionality.
Learning Objective: 1.1
Skill: Comprehension
AACSB: Application of Knowledge
6) Each state has the same hierarchy of courts from lowest to highest: district court, circuit
court, supreme court.
Answer: FALSE
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,Explanation: Some states invert some of the layers. In some states the circuit court is the
lowest and the district court is in the middle, for example.
Learning Objective: 1.2
Skill: Comprehension
AACSB: Application of Knowledge
7) The U.S. Supreme Court does not hear every case submitted to it.
Answer: TRUE
Explanation: There is no automatic right to be heard by the U.S. Supreme Court.
Learning Objective: 1.2
Skill: Comprehension
AACSB: Application of Knowledge
8) There are more federal district courts than state trial courts because more cases are brought
with federal jurisdiction than with state jurisdiction.
Answer: FALSE
Explanation: There are 94 federal district courts and many more state district courts.
Learning Objective: 1.2
Skill: Comprehension
AACSB: Application of Knowledge
9) The equal protection clause applies to both federal and state courts.
Answer: TRUE
Explanation: This is provided for in the 14th Amendment to the U.S. Constitution.
Learning Objective: 1.2
Skill: Comprehension
AACSB: Application of Knowledge
10) In order to sue someone, the court must have jurisdiction over both the parties and the
subject matter.
Answer: TRUE
Explanation: Courts must have both personal and subject matter jurisdiction.
Learning Objective: 1.3
Skill: Comprehension
AACSB: Application of Knowledge
11) To have jurisdiction, a court must have jurisdiction over either the parties or the subject
matter.
Answer: FALSE
Explanation: To have jurisdiction, a court must have both personal and subject matter
jurisdiction.
Learning Objective: 1.3
Skill: Comprehension
AACSB: Application of Knowledge
12) There are both courts of general and limited jurisdiction.
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,Answer: TRUE
Explanation: Courts of limited jurisdiction hear cases on a specific subject matter, such as
traffic or probate.
Learning Objective: 1.3
Skill: Comprehension
AACSB: Application of Knowledge
13) The statute of limitations always runs from the time the wrongful act was done.
Answer: FALSE
Explanation: The statute of limitations is tolled in some cases until the wrongful act is
discovered.
Learning Objective: 1.3
Skill: Comprehension
AACSB: Application of Knowledge
14) The concept that the federal and state governments share authority is called:
A) Imperialism
B) Supremacy
C) Federalism
D) Stare decisis
Answer: C
Explanation: The concept of federalism is captured in the U.S. Constitution.
Learning Objective: 1.1
Skill: Comprehension
AACSB: Application of Knowledge
15) The U.S. Constitution provides for specific powers to rest with the U.S. Congress. They are
known as:
A) Enumerated powers
B) Federalism
C) Policing powers
D) Federated powers
Answer: A
Explanation: The U.S. Constitution lays out the enumerated powers of Congress in Article I.
Learning Objective: 1.1
Skill: Comprehension
AACSB: Application of Knowledge
16) Which of the following is NOT true regarding treaties?
A) A treaty is an agreement between countries.
B) The president has the authority to negotiate treaties.
C) Treaties are approved by a simple majority of both the House and Senate.
D) Treaties are approved by a two-thirds vote in the Senate.
Answer: C
Explanation: Only the Senate provides advice and consent to the president on treaties.
Learning Objective: 1.1
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, Skill: Comprehension
AACSB: Application of Knowledge
17) The U.S. legal system is descended from:
A) French Napoleonic law
B) British common law
C) Dutch common law
D) Maritime law
Answer: B
Explanation: The U.S. legal system is considered a common law system, even though there are
other ways to establish laws, aside from judicial precedent. It descends from British common
law.
Learning Objective: 1.1
Skill: Comprehension
AACSB: Application of Knowledge
18) The idea that judicial decisions should only be overturned with great reluctance is:
A) Estoppel
B) Supremacy
C) Priority
D) Stare decisis
Answer: D
Explanation: Stare decisis is loosely translated as "Let the decision stand." It stands for the idea
that law should be stable and consistently applied. Therefore, prior decisions should be highly
respected.
Learning Objective: 1.1
Skill: Comprehension
AACSB: Application of Knowledge
19) Which of the following is NOT true regarding administrative regulations?
A) They do NOT have the binding authority of a law.
B) They are created by administrative agencies.
C) They are issued by agencies run by unelected officials.
D) They are created as part of the executive branch.
Answer: A
Explanation: They DO have the binding power of a law.
Learning Objective: 1.1
Skill: Comprehension
AACSB: Application of Knowledge
20) Which of the following is correct about executive orders?
A) They must be approved by the Senate.
B) They must be approved by both the House and Senate.
C) They cannot prohibit administrative agencies from doing something.
D) They have the force of law.
Answer: D
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